The Condition Stating That the Expected Percentage Change in the Exchange

question 42

Multiple Choice

The condition stating that the expected percentage change in the exchange rate is equal to the difference in interest rates between the countries is called:

• A)the unbiased forward rates condition.
• B)uncovered interest parity.
• C)the international Fisher effect.
• D)purchasing power parity.
• E)interest rate parity.

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Definitions:

Burden

In economic contexts, it often refers to the impact of taxes or regulations on individual or corporate finances.

Tax

Mandatory financial contributions imposed by governments on individuals, businesses, or transactions to finance government activities.

Buyers

Individuals or entities that purchase goods or services from sellers in exchange for money or other valuable considerations.

Sellers

Entities or people who make products or services available for purchase in the market.