Using actual market exchange rates and comparable short-term interest rates for the major currencies
A. uncovered interest parity is easier to test than covered interest parity.
B. we see that deviations from uncovered interest parity occur only during times of crisis.
C. we see that covered interest parity usually held well in the decade before the global financial and economic crisis.
D. we see that covered interest parity holds better between the currencies of countries that imposed broad capital controls.
Answer: C
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The speculative demand curve for money is:
a. downward sloping. b. upward sloping. c. vertical. d. horizontal. e. spiral.
If labor productivity growth slows down in a country, this will
A) accelerate the increase in real GDP per capita. B) accelerate the increase in nominal GDP. C) slow down the increase in real GDP per capita. D) slow down the increase in nominal GDP.
Refer to the information provided in Figure 33.3 below to answer the question(s) that follow.
Figure 33.3Refer to Figure 33.3. The domestic price of shoes is $80. After trade the price of a pair of shoes is $60. Now domestic production costs fall so that the equilibrium domestic price of a pair of shoes is $70. This would cause
A. the number of pairs of shoes imported into this country to increase. B. the number of pairs of shoes exported from this country to increase. C. the number of pairs of shoes exported from this country to decrease. D. the number of pairs of shoes imported into this country to decrease.
Mahatma Gandhi, John F. Kennedy, Martin Luther King Jr. are all cited as charismatic leaders. Economics tells us that charisma can be learned. What is the inconsistency in the economic argument?
What will be an ideal response?