Assume that the interest parity condition holds and that both the expected exchange rate and foreign interest rate are constant. Given this information, a reduction in the domestic interest rate will cause
A) a reduction in the exchange rate expected in the future.
B) a reduction in the current exchange rate.
C) greater depreciation of the domestic currency expected in the future.
D) all of the above
E) none of the above
B
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If a Japanese company sells 200 VCRs to a French company and uses the money to buy U.S. government bonds, the Japanese merchandise trade balance ________, and the Japanese financial account balance ________
A) rises; rises B) rises; falls C) falls; falls D) falls; rises
Tariff rates remained high after the Civil War because government revenue needs were pressing and there were protectionist sentiments
Indicate whether the statement is true or false
To acquire human capital a person would
What will be an ideal response?
The most desired goods or services that are given up when a choice is made are called the
A. Rationing device. B. Utility cost. C. Economic profit. D. Opportunity cost.