If in Chicago the interest rate is 5 percent a year and in Vancouver it is 4 percent a year, ________
A) the quantity of Canadian dollars purchased will increase
B) the Canadian dollar is expected to depreciate
C) interest rate parity does not exist
D) the U.S. dollar is expected to depreciate
D
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In a market with information asymmetry, gains from trade occur if:
A) the value of the good to the seller is greater than its value to the buyer. B) the value of the good to the buyer is greater than its value to the seller. C) the variable cost of producing the good is zero. D) the opportunity cost of consuming the good is zero.
Central bank independence ________
A) is receding as democratic movements gain influence around the world B) is correlated with relatively high unemployment C) remains an obstacle to policy transparency D) is the norm in a growing number of countries
If George's MPS is 0.75 and he earns an additional $1,000, how much would he spend?
a. $250 b. $750 c. $1,333 d. $4,000
Suppose a firm in a competitive market reduces its output by 20 percent. As a result, the price of its output is likely to
a. increase. b. remain unchanged. c. decrease by less than 20 percent. d. decrease by more than 20 percent.