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Roar Roar
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7 years ago
Suppose two countries make a credible commitment to fix their bilateral exchange rate. In such a situation, we know that
A) the uncovered interest parity condition no longer holds.
B) the real exchange rate must be constant as well.
C) each country can freely allow its interest rate to diverge from that of the other country.
D) the interest rate in the two countries must be equal.
E) neither country will run a trade deficit.
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Macroeconomics

Macroeconomics


Edition: 6th
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legendvpnlegendvpn
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7 years ago
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