Question
Assume we have two countries, US and Euroland, and two currencies, USD and Euro. If nominal interest rate in US increases, explain how equilibrium exchange
Assume we have two countries, US and Euroland, and two currencies, USD and Euro. If nominal interest rate in US increases, explain how equilibrium exchange rate changes (price of euro in terms of US dollar) under International Fisher Effect. What is the most important assumption in this analysis? Do we have the same finding if we use demand and supply analysis?
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Financial Markets And Institutions
Authors: Anthony Saunders, Marcia Millon Cornett
1st International Edition
0071181334, 9780071181334
