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Author Question: When domestic and foreign currency bonds are imperfect substitutes, the domestic interest rate (R) ... (Read 92 times)

Haya94

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on: Jun 30, 2018
When domestic and foreign currency bonds are imperfect substitutes, the domestic interest rate (R) can be written as
 
  A) R = R - (Ee - E)/E + .
  B) R = R - (Ee - E)/E.
  C) R = R + (Ee - E)/E + .
  D) R = R - (Ee + E)/E + .
  E) R = R - (Ee - E).

Question 2

Currently the NAFTA nations do not meet the conditions for an optimal currency area. What are the two main reasons why?
 
  What will be an ideal response?


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dpost18

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Reply #1 on: Jun 30, 2018
Answer to Question 1

C

Answer to Question 2

Historically Mexico's business cycle has not been correlated with the cycles in the United States and Canada; labor mobility is limited.


Haya94

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Reply 2 on: Jun 30, 2018
YES! Correct, THANKS for helping me on my review

dyrone

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Reply 3 on: Yesterday
Gracias!

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