Discuss difference between nominal interest rate and real interest rate. Explain why real interest rate is

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Discuss difference between nominal interest rate and real interest rate.

Explain why real interest rate is more important than the nominal interest rate using your answer to Question 1 of the numerical portion above.

Discuss the main difference between forward and future spot exchange rates.

Discuss whether the forward rates predict the future spot rate using your answers to Question 2 and Question 3 of the numerical portion above.

Describe how interest rate parity affects exchange rates.

Related Book For answer-question

Macroeconomics

ISBN: 978-0138014919

12th edition

Authors: Robert J Gordon

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Posted Date: May 04, 2024 12:15 AM

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Discuss difference between nominal interest rate and real interest rate. Explain why real interest rate is

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Difference between Nominal Interest Rate and Real Interest Rate Nominal Interest Rate The nominal interest rate is the stated rate of interest on a loan or investment without adjusting for inflation I... View the full answer

Macroeconomics

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