Using the UIP equation, what would happen to the spot rate for euros if the interest rate on U.S dollars deposits rises ceteris paribus?
A) the spot rate for euros would rise
B) the spot rate for euros would fall
c) the spot rate for euros would be unchanged
d) all of the above could happen
Ans: B) the spot rate for euros would fall
You might also like to view...
Import substitution industrialization in Latin America
A) relied on increased exports. B) provided subsidies for exports. C) shifted the bulk of exports away from primary commodities. D) created disincentives to export. E) Answers A and C are correct.
Refer to the figure below. What is the total amount of tax paid by Bart?
A. 0
B. 50
C. 15
D. 750
A move from M to N best represents a
A. change in quantity demanded.
B. change in demand.
C. increase in demand.
D. decrease in demand.
In November 2012, concern was raised about Spain's sovereign debt. Make use of a graph of the bond market to show how this would affect the price of Spanish bonds
What will be an ideal response?