From uncovered interest parity, we know that when the domestic currency is expected to depreciate, the domestic interest rate should be:
a. greater than the foreign interest rate.
b. greater than the foreign exchange rate.
c. less than the foreign interest rate.
d. less than the foreign exchange rate.
Ans: a. greater than the foreign interest rate.
You might also like to view...
Members of the Federal Reserve Board of Governors are appointed for one fourteen-year term:
A. In an effort to isolate the Fed from political pressures. B. So that Fed decisions will be based on political considerations. C. To give Congress better control over the money supply. D. In an effort to make the Fed responsive to voters.
If the Gini coefficient is zero, then we know
a. the value of the Lorenz curve must be one b. the income distribution is perfectly equal c. the richest quintile receives all the income d. the income in the economy has not changed e. the Lorenz curve lies above the diagonal