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please help with following case question In August of 2018, the Turkey Lira depreciated sharply against the US dollar. The underlying causes behind the depreciation
please help with following case question
In August of 2018, the Turkey Lira depreciated sharply against the US dollar. The underlying causes behind the depreciation of the Lira are:
- the exceptionally large external financing need (to buy goods from abroad and to pay foreign-denominated debt)
- a slowing global economy
- rising US interest rates
- high inflation
a. Explain how each of these four factors caused the Lira to depreciate against the US$.
b. How would the depreciation of the Lira affect the following?
- International trade
- Inflation in Turkey
- Foreign Investments into Turkey and Multinational Profits in Turkey
Thank You!
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