Question
If the domestic interest rate exceeds the foreign interest rate then according to the interest rate parity a. the interest rate gap has to be
If the domestic interest rate exceeds the foreign interest rate then according to the interest rate parity
a.
the interest rate gap has to be offset by an unchanged exchange rate of the domestic currency.
b.
the interest rate gap has to be offset by a past depreciation of the domestic currency.
c.
the interest rate gap has to be offset by an expected appreciation of the domestic currency.
d.
the interest rate gap has to be offset by an expected depreciation of the domestic currency.
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International Economics
Authors: Robert C. Feenstra, Alan M. Taylor
3rd edition
978-1429278515, 142927851X, 978-1319029517, 1319029515, 978-1429278447
