The covered interest rate parity condition can be stated as follows: The interest rate on dollar deposits equals the interest rate on euro deposits ________ the forward ________ on dollars against euros
A) plus; discount
B) minus; premium
C) plus; premium
D) minus; discount
E) times; premium
A
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If (PVB/PVC)for a given policy option equals 5.5, this means that
a. the policy option is not feasible b. for every dollar of incremental costs incurred by society, there are $5.50 in realized incremental benefits c. the policy option is feasible d. both (b) and (c) are correct
Rents for stores at shopping malls are usually tied to the profits of the store. Comment on how this arrangement affects the mall owner's income versus a fixed rent
What will be an ideal response?
The track record of foreign assistance
a. is not very clear. b. shows that it have been very successful in helping poor countries. c. has enhanced the protection of private property rights in less developed countries. d. has drastically reduced corruption in less developed countries. e. has made most economists skeptical.
Why did John Maynard Keynes declare that aggregate demand was "inherently unstable"?
a. "Investment decisions were often guided by unpredictable animal spirits of business expectations." b. "Aggregate demand was measured incorrectly for decades." c. "Aggregate demand is not affected by any government action." d. "An federal expansionary policy is not a proper tool for stimulating the economy."