For this question, assume that the domestic interest rate is 6% and that the foreign interest rate 4%. And finally, assume that the domestic currency is expected to appreciate by 3% during the coming year. Given this information, we know that
A) individuals will only hold domestic bonds.
B) individuals will only hold foreign bonds.
C) individuals will be indifferent about holding domestic or foreign bonds.
D) the interest parity condition holds.
A
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Which of the following combinations would produce conflicting effects on the supply of money? a. The Fed pays a higher interest rate on bank reserves and increases the required reserve ratio
b. The Fed conducts an open market purchase of government securities and raises the discount rate. c. The Fed pays a lower interest rate on bank reserves and conducts an open market purchase of government securities. d. All of the above would produce conflicting effects on the supply of money
Exhibit 6-2 Refer to Exhibit 6-2. How many persons are not participating in the labor force in year 2?
a. 200 million b. 50 million c. 75 million d. 175 million e. 100 million
A cost of an activity that falls on people not engaged in the activity is called a(n):
A. negative externality. B. prisoner's dilemma. C. positive externality. D. external benefit.
Unregulated natural monopolies:
A. create no problems for policy-makers. B. are always protected by government policy. C. can capture profits by restricting output. D. never capture lowest costs per unit possible.