Interest Rate Parity Says That

question 6

Multiple Choice

Interest rate parity says that:

• A)the interest rate differential is the growth rate of the nominal exchange rate.
• B)the interest rate differential is ratio of the foreign price level to the home price level.
• C)the interest rate differential is the growth rate of the real exchange rate.
• D)the interest rate differential is ratio of the home price level to the foreign price level.

---

Definitions:

Receiver Reaction

The response or feedback from the individual or group who receives a message or information.

Adjustment Messages

Communications intended to address and rectify a problem or complaint.

Claims

Statements or assertions made about something, usually requiring evidence or proof.

Acknowledgment Messages

Communications that confirm the receipt of a message, document, or product, often expressing appreciation or verification.