32-2 Thank you in advance!! A firm produces construction equipment, some of whic

Question

32-2 Thank you in advance!!

A firm produces construction equipment, some of which it sells to domestic businesses and some of which it exports. Which of the following effects of capital flight in the country where it produces would likely increase the quantity of equipment it sells? what happens to the interest rate but not what happens to the exchange rate what happens to the exchange rate but not what happens to the interest rate both what happens to the interest rate and what happens to the exchange rate neither what happens to the interest rate nor what happens to the interest rate.

Explanation / Answer

c) both what happens to the interest rate and what happens to the exchange rate.

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