Suppose interest rates in the U.S. are 3% while interest rates on comparable bonds in Japan are 1%. By how much is the exchange rate between the yen and dollar expected to change according to the interest-rate parity condition?
What will be an ideal response?
The expected change in the value of the dollar is 1%-3% = -2%, implying an expected 2% depreciation in the value of the dollar.
Economics
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Cartels are difficult to operate for which of the following reasons?
a) The work only if members keep to their agreed output b) they are illegal worldwide c) Firms in a cartel are likely to lose money d) The products are perfectly competitive
Economics
When a market is in disequilibrium consumers and producers change their behavior. As a result the market reaches equilibrium
Indicate whether the statement is true or false
Economics