Author Question: Under fixed exchange rate, in general A) the domestic and foreign interest rates are equal, R = R ... (Read 108 times)

littleanan · **on:** Jun 30, 2018

Under fixed exchange rate, in general

A) the domestic and foreign interest rates are equal, R = R .
B) R = R + (Ee - E)/E.
C) the foreign and domestic interest rates are unequal.
D) the expected rate of domestic currency depreciation is high.
E) the expected rate of currency depreciation is one.

Question 2

The United States finances current account deficits largely with dollars and, as a result, faces almost no constraint on its ability to run deficits.

Indicate whether the statement is true or false