Author Question: Interest rate parity occurs when A) interest rates are equal across nations. B) interest rate ... (Read 336 times)

storky111

  • Hero Member
  • *****
  • Posts: 561
Interest rate parity occurs when
 
  A) interest rates are equal across nations.
  B) interest rate differentials are always maintained across nations.
  C) interest rates no longer affect the exchange rate.
  D) prices are equal across nations when exchange rates are taken into account.
  E) the interest rate in one currency equals the interest rate in another currency when exchange rate changes are taken into account.
 
  The figure above shows the demand curve for dollars in the foreign exchange market.

Question 2

What effect does an increase in real GDP have on the demand for money?
 
  What will be an ideal response?



Danny Ewald

  • Sr. Member
  • ****
  • Posts: 332
Answer to Question 1

E

Answer to Question 2

An increase in real GDP increases the demand for money and shifts the demand for money curve rightward.



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question


 

Did you know?

Never take aspirin without food because it is likely to irritate your stomach. Never give aspirin to children under age 12. Overdoses of aspirin have the potential to cause deafness.

Did you know?

About 3% of all pregnant women will give birth to twins, which is an increase in rate of nearly 60% since the early 1980s.

Did you know?

Malaria was not eliminated in the United States until 1951. The term eliminated means that no new cases arise in a country for 3 years.

Did you know?

Your chance of developing a kidney stone is 1 in 10. In recent years, approximately 3.7 million people in the United States were diagnosed with a kidney disease.

Did you know?

According to animal studies, the typical American diet is damaging to the liver and may result in allergies, low energy, digestive problems, and a lack of ability to detoxify harmful substances.

For a complete list of videos, visit our video library