« previous next »

Author Question: Interest rate parity is more likely to hold in the short run than purchasing power parity. ... (Read 150 times)

Awilson837

  • Hero Member
  • *****
  • Posts: 509
on: Jun 30, 2018
Interest rate parity is more likely to hold in the short run than purchasing power parity.
 
  Indicate whether the statement is true or false

Question 2

Countries with large current account surpluses might be viewed by the market as candidates for
 
  A) devaluation.
  B) revaluation.
  C) bankruptcy.
  D) depreciation.
  E) investment.


johnpizzaz

  • Sr. Member
  • ****
  • Posts: 345
Reply #1 on: Jun 30, 2018
Answer to Question 1

TRUE
Explanation: Financial asset prices typically adjust to new information more quickly than goods prices. Since interest rates are the return to holding interest-bearing financial assets, we might expect interest rates to adjust quickly to new information just like exchange rates.

Answer to Question 2

B


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

The top 10 most important tips that will help you grow old gracefully include (1) quit smoking, (2) keep your weight down, (3) take supplements, (4) skip a meal each day or fast 1 day per week, (5) get a pet, (6) get medical help for chronic pain, (7) walk regularly, (8) reduce arguments, (9) put live plants in your living space, and (10) do some weight training.

Did you know?

The oldest recorded age was 122. Madame Jeanne Calment was born in France in 1875 and died in 1997. She was a vegetarian and loved olive oil, port wine, and chocolate.

Did you know?

The average older adult in the United States takes five prescription drugs per day. Half of these drugs contain a sedative. Alcohol should therefore be avoided by most senior citizens because of the dangerous interactions between alcohol and sedatives.

Did you know?

When taking monoamine oxidase inhibitors, people should avoid a variety of foods, which include alcoholic beverages, bean curd, broad (fava) bean pods, cheese, fish, ginseng, protein extracts, meat, sauerkraut, shrimp paste, soups, and yeast.

Did you know?

Pope Sylvester II tried to introduce Arabic numbers into Europe between the years 999 and 1003, but their use did not catch on for a few more centuries, and Roman numerals continued to be the primary number system.

Influence of substrate concentration on the rate of an enzyme-catalyzed reaction. Influence of substrate concentration on the rate of an enzyme-catalyzed reaction.
A typical peak-and-hold fuel-injector waveform. Most fuel injectors that measure less than 6 ohms ... A typical peak-and-hold fuel-injector waveform. Most fuel injectors that measure less than 6 ohms ...
A backpressure tool can be made by using an oxygen sensor housing and using epoxy or braze to hold ... A backpressure tool can be made by using an oxygen sensor housing and using epoxy or braze to hold ...
How to calculate simple interest (Part 3) How to calculate simple interest (Part 3)
Small local hydroelectric power generators have more future potential Small local hydroelectric power generators have more future potential
Use the power rule to find derivative Use the power rule to find derivative
Video: Exocytosis - secretion

For a complete list of videos, visit our video library