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Hey! Would love some advice on the following true or false questions! I'm unsure of the answers Revision Task 4: Exchange Rates TRUE/FALSE: Interest rate
Hey! Would love some advice on the following true or false questions! I'm unsure of the answers
Revision Task 4: Exchange Rates
- TRUE/FALSE: Interest rate parity implies that a higher domestic interest rate leads to an appreciation.
- TRUE/FALSE: In the open economy IS-LM model an increase in the interest rate leads to a decrease in output AND an appreciation.
- TRUE/FALSE: In the open economy IS-LM model an increase in government spending leads to an increase in output when the Central Bank keeps interest rate constant.
- TRUE/FALSE: In the open economy IS-LM model an increase in government spending that is match by a monetary policy expansion will increase output AND cause the exchange rate to depreciate.
- TRUE/FALSE: Exchange rate crisis can happen just because financial market participants believe a currency peg is unsustainable even if it is sustainable
- TRUE/FALSE: Under a fixed exchange rate regime the central bank is free to run monetary policy as it wishes
- TRUE/FALSE: Any factor that increase expectedfuturedomestic interest rateswill have no affect on the exchange ratetoday
- TRUE/FALSE: Thailand, Indonesia, and Koreacould have defended there exchange rate parityin 1997 without an adverse macroeconomicimpacts if they really wanted to.
- TRUE/FALSE: Britain's return to the gold standard in 1925made its economy boom.
- TRUE/FALSE: If the nominal exchangerateis fixed then the real exchangerate will be fixed.
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