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Deviations from Interest Rate Parity Could Be Due to Transaction

question 12

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Deviations from interest rate parity could be due to transaction costs,differential taxation,government controls,and political risk.


Definitions:

Movie Tickets

Pre-purchased vouchers or electronic codes that allow the holder to watch a film at a movie theater.

Inferior Good

An Inferior Good is a type of good whose demand decreases as the income of consumers increases, contrasting with normal goods.

Income

This is the financial gain (money) earned by an individual or entity, usually over a period of time, through work, investments, or business ventures.

Demand

The total amount of a good or service that consumers are willing and able to purchase at various prices during a specified period.

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