appraise the economic/financial outcomes of different interest rates from an international perspective

Project Description:

hello, im come again.
here is the question:
suppose you read in a newspaper that the nominal interest rate is 12 percent per year in new zealand and 8 percent in australia. suppose also that international capital flows equalise the real interest rates in the two countries and that purchasing-power parity holds. write a short essay to analyse and answer the following questions (no diagrams are required).

a. using the fisher equation (discussed in chapter 5), what can you infer about expected inflation in new zealand and in australia?

b. what can you infer about the expected change in the exchange rate between the kiwi dollar and the aussie dollar?

c. some one proposes to you a get-rich-quick scheme: borrow from an australian bank at 8 percent, deposit the money in an nz bank, and make a 4 percent profit. it this scheme right or wrong, and why?

(word limit: 1,000)
can you do this with 16h? and how much
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