Answer Happy

In the table, place an X to indicatewhether each economic condition will cause investment funds to flowin or out of the country and whether the domestic currency willappreciate or depreciate.
Domestic circumstance relative to othercountries
Funds
flow in
Funds
flow out
Currency
Appreciates
Currency
Depreciates
Taxes increase
Inflation increases rapidly
Expected stock market returns are high
Economy enters severe recession (consider only importeffect)
Real GDP rises
Import effect
Expected asset returns
Expected economic risk
Rioting erupts in protest government policies
A large deposit of rare earth minerals is discovered
Central bank raises interest rates
Asset prices are expected to appreciate
Rapidly growing manufacturing sector imports more foreign rawmaterials
World prices fall for the country’s major export commodity
Central bank purchase the domestic currency