A constant differential between the interest rates of two countries over different terms to maturity implies that future changes in the exchange rate are expected to occur at a(n) ________ rate
A) constant
B) increasing
C) decreasing
D) None of the above
A
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“OPEC is exploiting the United States by selling us oil at inflated prices.” Agree or disagree.
What will be an ideal response?
In 2008, as the economy moved into a recession,
A) cyclical unemployment increased. B) structural unemployment decreased. C) natural unemployment decreased. D) frictional unemployment was not affected. E) the number of marginally attached workers decreased.
A problem with Leontief's methodology is that
A) he had no information on U.S. and foreign factor endowments. B) he did not use information on foreign factor intensities. C) he ignored the roles of other factors of production such as natural resources. D) All of the above are problems.
Assume that the central bank lowers the discount to increase the nation's monetary base. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the current international transactions balance and monetary base in the context of the Three-Sector-Model? State your answer after the macroeconomic system returns to complete equilibrium
a. The current international transactions balance rises and monetary base rises. b. The current international transactions balance rises and monetary base falls. c. The current international transactions balance and monetary base fall. d. The current international transactions balance and monetary base remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.