Using the UIP equation, what would happen to the spot rate for euros if the interest rate on U.S. dollar deposits rises ceteris paribus?
a. The spot rate to purchase euros would rise (dollar depreciation).
b. The spot rate to purchase euros would fall (dollar appreciation).
c. The spot rate to purchase euros would be unchanged.
d. The U.S. Federal Reserve would have to raise U.S. short-term interest rates.
Ans: b. The spot rate to purchase euros would fall (dollar appreciation).
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The typical by-product of policies that create more equality by making the rich worse off is _____
a. an increase in the economic multiplier b. a decline in conspicuous consumption c. and increase in social stratification d. a lowering of economic productivity
Figure 3-13
Refer to . The market for margarine was initially in equilibrium at point e. Other things constant, an increase in the price of soybean oil, an important ingredient used to produce margarine, would likely move the equilibrium in this market toward point
a.
r.
b.
s.
c.
t.
d.
u.