Suppose the interest parity condition holds and that the domestic interest rate is less than the foreign interest rate. What does this imply about the current versus future expected exchange rate? Explain
What will be an ideal response?
If i < i*, we know that the foreign currency must be expected to depreciate to equate the expected returns on the two bonds.
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When scarce goods are allocated according to some generally known criteria,
A) no one is discriminated against as long as the criteria are socially and legally accepted. B) people will compete to satisfy the criteria. C) rationing of scarce goods becomes unnecessary. D) surpluses almost inevitably appear.
Refer to the scenario above. If Alice wins the auction, the seller earns an average revenue of ________
A) $30,000 B) $25,000 C) $24,000 D) $36,000
What was the approximate value of the U.S. current account balance in 2011?
A) +$10 billion B) +$79 billion C) -$380 billion D) -$475 billion
If a member of the Board of Governors is limited to one 14-year term, how did Alan Greenspan serve 19 years on the Board of Governors?
A) A special exemption was approved for him. B) The rule was not in place at the time. C) He completed the remaining years left on someone else's term and then served one 14-year term. D) He didn't serve consecutive terms.