The Principle Involved in Short-Run Uncovered Interest Parity Is That

question 5

Multiple Choice

The principle involved in short-run uncovered interest parity is that home interest rates will be equal to:

• A) the world equilibrium real rate of interest.
• B) the foreign interest rate minus foreign inflation.
• C) the foreign rate of interest plus the expected rate of depreciation of the home currency.
• D) the domestic nominal rate of interest plus domestic inflation.

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