Author Question: Assume the interest parity condition holds and that individuals expect the dollar to appreciate by 5 ... (Read 19 times)

Mr3Hunna · **on:** Jun 30, 2018

Assume the interest parity condition holds and that individuals expect the dollar to appreciate by 5 during the coming year. Given this information, we know that

A) the interest rate differential between the two countries is less than 5.
B) i < i.
C) i = i.
D) individuals will only hold foreign bonds.
E) none of the above

Question 2

A reduction in the minimum wage will tend to cause which of the following?

A) an upward shift in the WS curve
B) a downward shift in the WS curve
C) an upward shift in the PS curve
D) a downward shift in the PS curve
E) none of the above