Suppose that the UIP holds. If the U.S. interest rate is 9% and the eurozone interest rate is 5%, then in the short run we would expect:
a) the dollar to appreciate approximately by 4%
b) the dollar to depreciate approximately by 4%
c) the dollar to appreciate by 14%
d) insufficient information is provided
Ans: b) the dollar to depreciate approximately by 4%
Economics
You might also like to view...
Eliminating important details in economic analysis is necessary to understand the complexity of the economy
a. True b. False Indicate whether the statement is true or false
Economics
Which of the following is a distinguishing characteristic of the oligopoly market structure?
a. easy entry b. difficult entry c. many, many firms d. many, many close substitutes e. firms's horizontal demand curves
Economics