Under PPP (and by the Fisher Effect), all else equal
A) a rise in a country's expected inflation rate will eventually cause a more-than proportional rise in the interest rate that deposits of its currency offer in order to accommodate for the higher inflation.
B) a fall in a country's expected inflation rate will eventually cause an equal rise in the interest rate that deposits of its currency offer.
C) a rise in a country's expected inflation rate will eventually cause an equal rise in the interest rate that deposits of its currency offer.
D) a rise in a country's expected inflation rate will eventually cause a less than proportional rise in the interest rate that deposits of its currency offer to accommodate the rise in expected inflation.
E) a fall in a country's expected inflation rate will eventually cause an inversely proportional rise in the interest rate that deposits of its currency offer to accommodate the rise in expected inflation.
Question 2
With perfect asset substitutability and capital mobility the domestic interest rate is equal to the foreign rate.
Indicate whether the statement is true or false
Expected and Unexpected Reinforcers
A person with a defective "P" gene might only have it effect the Hair
Effect of Atmospheric Stability
A close relationship between greenhouse gas emissions and a country’s gross domestic product
Effect of an Increase in gA,2 on Productivity and Output
The Effect of Using PPP on Comparisons of GDP