can set the stage for international financial investors first to send their funds to a country and cause an appreciation of its exchange rate and then to pull their funds out and cause a depreciation of the exchange rate and a financial crisis as well.

Trade balance

Explanation:

A positive trade balance will result in currency appreciation because more goods are exported than imported, which means that there is a net inflow of the home country's currency, increasing its value against foreign currency.

This can lead first to more foreign direct investment because a trade balance is a sign of a strong economy, however, in the long run there can be a radical change in the business cycle: the appreciated currency will make the home country's goods more expensive, reducing the demand for them abroad, in turn decreasing exports, turning the trade balance into negative numbers, and causing a net ouflow of foreign direct invesment due to the weaker economy, and the capital losses because of the currency depreciation.

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explanation:

cognitive overload: having a lot on your mind impairs decision-making and tends to result in the simplest, but not necessarily best, option being selected.

empathy gaps: overlooking how you might feel in a different situation can result in unnecessary purchases, such as overbuying when shopping for food on an empty stomach.

optimism and overconfidence: wearing rose-tinted glasses and having unrealistic expectations about the future can affect money management and leave you unprepared for a change in circumstance.

instant gratification: seeking instant gratification drives impulsive spending and can undermine long-term planning and savings.

harmful habits: automatic or mindless behaviour can amplify a poor financial decision as it becomes a recurring event.

social norms: we are heavily influenced by the actions of others; while this can be in certain circumstances, it also contributes to the pressure to keep up with the joneses through conspicuous consumption.