Suppose Two Countries Make a Credible Commitment to Fix Their

question 51

Multiple Choice

Suppose two countries make a credible commitment to fix their bilateral exchange rate.In such a situation,we know that

• A)the uncovered interest parity condition no longer holds.
• B)the real exchange rate must be constant as well.
• C)each country can freely allow its interest rate to diverge from that of the other country.
• D)the interest rate in the two countries must be equal.
• E) neither country will run a trade deficit.

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Definitions:

S Phase

The phase of the cell cycle during which DNA is replicated, preparing the cell for division.

Secondary Oocyte

The cell that forms after the first division in oogenesis and can develop into an ovum after fertilization.

Diploid Organism

An organism whose cells contain two sets of chromosomes, one set inherited from each parent, which is characteristic of most adult forms of life.

Spermatogenesis

The process of sperm cell development, occurring in the testes, through which spermatogonial stem cells differentiate into mature sperm.