According to the Interest Parity Condition,if the Domestic Interest Rate

question 34

Multiple Choice

According to the interest parity condition,if the domestic interest rate is 10 percent and the foreign interest rate is 12 percent,then the expected ________ of the foreign currency must be ________ percent.

• A)appreciation;4
• B)appreciation;2
• C)depreciation;2
• D)depreciation;4

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Definitions:

Country

A nation with its own government, occupying a particular territory.

Crude Death Rate

A measure of the number of deaths in a given population during a specified period, typically expressed per thousand individuals per year.

Deaths

refers to the cessation of all biological functions that sustain living organisms, marking the end of life.

Population

The total number of people or inhabitants in a particular area or country.