Under a Fixed Exchange Rate System,if the Nominal Interest Parity

question 91

Multiple Choice

Under a fixed exchange rate system,if the nominal interest parity condition holds,

• A)the nominal interest rates in domestic and foreign economies must be the same.
• B)the inflation rates in domestic and foreign economy must be the same.
• C)the real exchange rates in domestic and foreign economies must be the same.
• D)the net exports in domestic and foreign economies must be the same.

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Definitions:

Body

The physical structure of a person or an organism, encompassing all its biological systems and parts.

Interact

To act in such a way as to have an effect on another; to act reciprocally or influence each other.

Egocentric Predicament

The problem that seems to follow from the view that we know only our own minds directly—that is, that we might never know anything or anyone else.

Selfish Beings

Pertains to individuals primarily concerned with their own interests and benefits, often at the expense of others.