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Author Question: The difference between a Euroloan interest rate and Eurodeposit interest rate is called A) net ... (Read 71 times)

abc

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on: Jun 30, 2018
The difference between a Euroloan interest rate and Eurodeposit interest rate is called
 
  A) net interest rate.
  B) the forward premium.
  C) net profit rate.
  D) the spread.

Question 2

Does the existence of non-tradable goods allow for deviations from Purchasing power Parity?
 
  What will be an ideal response?


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cuttiesgirl16

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

D

Answer to Question 2

Yes, the existence of nontradables allows deviations from PPP. This is because the price of a nontradable is determined entirely by its domestic supply and demand curves, and in turn fluctuations in demand and supply for these good will affect the price level. Examples include housing, haircut, services etc.


abc

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Reply 2 on: Jun 30, 2018
Gracias!

isabelt_18

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Reply 3 on: Yesterday
Great answer, keep it coming :)

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