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Author Question: If the interest rate on a bank deposit in the United States is 3 percent while a similar deposit ... (Read 201 times)

Yi-Chen

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If the interest rate on a bank deposit in the United States is 3 percent while a similar deposit earns 6 percent in Britain, then we could expect that deposits would flow to
 
  A) Britain if the pound is expected to depreciate more than 3 percent.
  B) the United States regardless of exchange rate expectations.
  C) the United States if the dollar is expected to appreciate less than 3 percent.
  D) Britain if the pound is expected to depreciate less than 3 percent.
  E) Britain regardless of exchange rate expectations.

Question 2

In the long run, the real interest rate is 3 percent, real GDP grows at 4 percent, velocity is constant, and the quantity of money grows at 8 percent. The nominal interest rate is
 
  A) 7 percent. B) 12 percent. C) 10 percent. D) 8 percent. E) 6 percent.



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zacnyjessica

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Answer to Question 1

D

Answer to Question 2

A




Yi-Chen

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Reply 2 on: Jun 29, 2018
Excellent


ultraflyy23

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Reply 3 on: Yesterday
Great answer, keep it coming :)

 

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