国际金融ch16学习课件.pptVIP

* Shifting the AA Curve (cont.) Changes in P: An increase in the domestic price level decreases the real money supply, increasing interest rates, causing the domestic currency to appreciate (a fall in E): the AA curve shifts down (left). Changes in real money demand: if domestic residents are willing to hold lower real money balances, interest rates fall, leading to a depreciation of the domestic currency (a rise in E): the AA curve shifts up (right). * Shifting the AA Curve (cont.) Changes in R*: An increase in the foreign interest rates makes foreign currency deposits more attractive, leadi