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Portfolio Balance Model (asset market approach)

June 1, 2016

Focuses on the long-term implications of sustained fiscal policy (deficit or surplus) on currency values.

When the government runs a fiscal deficit, it borrows money from investors. Under the portfolio balance approach, sustained fiscal deficits will lead to eventual depreciation of the home currency.


From → Economics

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  1. Another CFA® Exam is Finished – Muskblog

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