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Assume that the interest parity condition holds and that both the expected exchange rate and foreign ...

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Assume that the interest parity condition holds and that both the expected exchange rate and foreign ...

Assume that the interest parity condition holds and that both the expected exchange rate and foreign interest rate are constant. Given this information, a reduction in the domestic interest rate will cause
A) a reduction in the exchange rate expected in the future.
B) a reduction in the current exchange rate.
C) greater depreciation of the domestic currency expected in the future.
D) all of the above
E) none of the above

Textbook

Macroeconomics

Edition: 6^th

Authors: Blanchard, Johnson

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Roar Author

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7 years ago

I appreciate what you did here, answered it right Smiling Face with Open Mouth

big_larry_samp

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Correct

noodlelicker

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Thanks

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