Author Question: Assume that the interest parity condition holds. Also assume that the U.S. interest rate is 6 while ... (Read 71 times)

@Brianna17 · **on:** Jun 30, 2018

Assume that the interest parity condition holds. Also assume that the U.S. interest rate is 6 while the U.K. interest rate is 8. Given this information, financial markets expect the pound to

A) depreciate by 14.
B) depreciate by 2.
C) appreciate by 2.
D) appreciate by 6.
E) appreciate by 14.

Question 2

Leapfrogging refers to

A) the typical irregular pattern of growth: rapid in some decades, and almost non-existent in others.
B) the tendency for a country's output per capita to catch up to, and then exceed, that of another country.
C) one-upsmanship by politicians who use growth statistics to help win elections.
D) the increased likelihood that a country with very high growth will have a recession, during which some other country will have the highest growth rate.
E) the interchangeability of capital and labor in the aggregate production function.