Explain why large interest rate differences would be strong evidence of unrealized gains from trade
What will be an ideal response?
The difference between onshore and offshore interest rates on similar assets denominated in the same currency should be small if information about global investment opportunities is transmitted efficiently. Data show that this is the case for the U.S., Germany, Japan and the Netherlands.
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A graph measures y on the vertical axis and x on the horizontal. The curve on the graph is a vertical line. From this fact we know that
A) the value of x does not change when the value of y changes. B) the value of y is constant. C) the ratio of x to y is constant. D) the ratio of y to x is constant.
Last year, the unemployment rate was 4 percent and the inflation rate was 3 percent. If the natural rate of unemployment is 3 percent, how do you expect inflation to change?
What will be an ideal response?