Question
Consider the Interest Parity condition and the Interest Parity curve (IP). In a flexible exchange rate regime. a decrease in the foreign interest rate (i*)
Consider the Interest Parity condition and the Interest Parity curve (IP). In a flexible exchange rate regime. a decrease in the foreign interest rate (i*) will cause:
A. Neither a shift nor movement along the IP curve.
B. A movement along the IP curve.
C. The IP curve to shift to the left/up.
D. The IP curve to shift to the right/down.
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Microeconomics
Authors: Austan Goolsbee, Steven Levitt, Chad Syverson
2nd edition
1464187029, 978-1464189104, 1464189102, 978-0716759751, 716759756, 978-1464187025
