Author Question: The ________ relation indicates that the interest differential between investments in two currencies ... (Read 18 times)

daltonest1984 · **on:** Jun 30, 2018

The ________ relation indicates that the interest differential between investments in two currencies will equal the forward premium or discount between the currencies.

A) Fisher equation
B) interest rate parity
C) purchasing power parity
D) term structure of interest rates

Question 2

It may be demonstrated that any protectionist policy, which effectively shifts real resources to import competing industries or sectors will harm export industries or sectors. This may, for example, happen by the strengthening U.S.

dollar in the foreign exchange market. Would you propose therefore that export industries lobby against protectionism in International Trade Commission proceedings? What of consumer advocates? Discuss the pros and the problems of such a suggestion.

xoxo123 · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

B

Answer to Question 2

Actually this is an interesting idea. It is well known that the public interest is put on hold as the ITC considers only the squeaky wheels of those allegedly hurt by trade. While consumers may be too amorphous a group to successfully organize and pursue a political agenda, the exporters and consumer advocates may be able to form a counter weight to the import competing industries.