Question 3 (a) Describe what the covered interest parity (CUP) and the uncovered interest parity (UIP) are and highlight their differences. Using the UIP equation, explain what happens with the spot exchange rate when there is a shock to expected exchange rate depreciation or to the foreign interest rate. Using again the UIP condition, critically discuss what is understood by the Triiemma in international economics [50 marks] (b) Discuss the main contribution of the paper by Hlne Rey (2015), "Dilemma not Trilemma: The global Financial Cycle and Monetary Policy Independence". [50 marks]