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Chako Chako
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8 years ago
Under sticky prices
A) an interest rate rise is associated with higher expected inflation and a long-run currency appreciation, so the currency appreciates immediately.
B) an interest rate rise is associated with lower expected inflation and a long-run currency appreciation, so the currency appreciates immediately.
C) an interest rate rise is associated with lower expected inflation and a long-run currency depreciation, so the currency depreciates immediately.
D) an interest rate rise is associated with lower expected deflation and a long-run currency appreciation, so the currency appreciates immediately.
E) an interest rate rise is associated with lower expected inflation and a long-run currency depreciation, so the currency appreciates immediately.
Textbook 
International Economics: Theory and Policy

International Economics: Theory and Policy


Edition: 10th
Author:
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machukianmachukian
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#1
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8 years ago
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Chako Author
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#2
8 years ago
Good answer, thank you
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#3
8 years ago
Good luck
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