This topic contains a solution. Click here to go to the answer

Author Question: Suppose the U.S. one-year interest rate is 3 per year, while a foreign country has a one-year ... (Read 67 times)

nevelica

  • Hero Member
  • *****
  • Posts: 563
Suppose the U.S. one-year interest rate is 3 per year, while a foreign country has a one-year interest rate of 5 per year. Ignoring risk and transaction costs, a U.S. investor should invest in foreign bonds as long as the expected yearly rate of depreciation of the foreign currency is
 
  A) less than 5.
  B) greater than 5.
  C) greater than 2.
  D) less than 2.
  E) less than 1.

Question 2

Explain how an increase in the unemployment rate will affect bargaining power and nominal wages.
 
  What will be an ideal response?



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

chloejackso

  • Sr. Member
  • ****
  • Posts: 316
Answer to Question 1

D

Answer to Question 2

As the unemployment rate increases, it is more difficult for individuals to find employment at other firms. So, workers' bargaining power will fall. As bargaining power falls, the nominal wage will fall.




nevelica

  • Member
  • Posts: 563
Reply 2 on: Jun 30, 2018
:D TYSM


AmberC1996

  • Member
  • Posts: 317
Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

 

Did you know?

Coca-Cola originally used coca leaves and caffeine from the African kola nut. It was advertised as a therapeutic agent and "pickerupper." Eventually, its formulation was changed, and the coca leaves were removed because of the effects of regulation on cocaine-related products.

Did you know?

Always store hazardous household chemicals in their original containers out of reach of children. These include bleach, paint, strippers and products containing turpentine, garden chemicals, oven cleaners, fondue fuels, nail polish, and nail polish remover.

Did you know?

In 2010, opiate painkllers, such as morphine, OxyContin®, and Vicodin®, were tied to almost 60% of drug overdose deaths.

Did you know?

The FDA recognizes 118 routes of administration.

Did you know?

Approximately 25% of all reported medication errors result from some kind of name confusion.

For a complete list of videos, visit our video library