decreases increases decreases increases decreases increases left right decreases increases decreases increases Highlight the correct answer. In the Real Credit Market The government borrows funds to increase spending. The demand for funds: The real interest rate (0) The amount of funds borrowed per time: In the Real Goods and Services Market G increases, therefore AD shifts (C & I will decrease, but G dominates): RGDP: The GDP Price Index (P): In the Foreign Exchange Market RGDP causes the domestic currency to: GDP Price Index causes the domestic currency to: The real interest rate causes the domestic currency to: If capital mobility is high, the domestic currency will: If capital mobility is low, the domestic currency will: Effect on Net Exports RGDP causes imports to: GDP Price Index causes exports to: The combined effect of RGDP and GDP Price Index causes NE: If the domestic currency appreciates, NE will: With high capital mobility, NE will cause a secondary effect that makes expansionary fiscal policy (more or less) effective NE may increase or decrease depending on which forces are dominate depreciate appreciate depreciate appreciate depreciate appreciate depreciate appreciate depreciate appreciate decrease decrease decrease increase increase increase increase decrease less more