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  • Card 8 / 9:
    Use the demand-and-supply of foreign currency graph to determine what would happen to a small, open economy that experienced capital outflows.

    The demand for the country’s currency would decrease, lowering the exchange rate.

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Source:  OpenStax, Macroeconomics. OpenStax CNX. Jun 16, 2014 Download for free at http://legacy.cnx.org/content/col11626/1.10
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