Question: Please I n eed the answer now 8. That the spot exchange rate should change in an approximately equal but opposite direction to the difference
Please I n
eed the answer now
8. That the spot exchange rate should change in an approximately equal but opposite direction to the difference in interest rates (as indicated by the four-way equivalence model) between two countries is called: (a) interest rate parity (b) covered interest arbitrage (c) the Fisher effect (d) the international Fisher effect (e) expectations theory (1) purchasing power parity 9. If a country's government imposes a tariff on imported goods, that country's current account balance will tend to (assuming no retaliation by other governments) in the short run: (a) decrease (b) increase (c) be unaffected (d) none of the above is correct 10. The J curve describes: (a) the long-term relationship between country's current account balance and its growth in gross national product (b) the short run tendency for a country's balance of trade to deteriorate even while its currency is depreciating immediately thereafter (c) the tendency for exports initially to reduce the price of goods when their own currency appreciates (d) the tendency of a country's currency initially to depreciate immediately following a decline in its inflation rate
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