Suppose that interest parity does not hold exactly, but that the true relationship is R R (E e E) E p , where p is a term measuring the differential riskiness of domestic versus foreign deposits Suppose a permanent rise in domestic government spending, by creating the prospect of future government deficits, also raises , that is, makes domestic currency deposits more risky Evaluate the policy's output effects in this situation Based on our discussion of a fixed exchange rate, how sustainable is a USD pegged cryptocurrency Review the content from the following link Winklevoss Brothers and Pegged Cryptocurrency and discuss the potential threats and advantages of having a USD backed cryptocurrency Utilizes any and all graphs from class when answering If a government initially has a balanced budget but then cuts taxes, it is runninga deficit that it must somehow finance Suppose people think the government will finance its deficit by printing the extra money it now needs to cover its expenditures Would you still expect the tax cut to cause a currency appreciation If a country changes its exchange rate, the value of its foreign reserves, measured in the domestic currency, also changes This latter change may represent a domestic currency gain or loss for the central bank What happens when a country devalues its currency against the reserve currency When it revalues How might this factor affect the potential cost of holding foreign reserves Make sure to consider the role of interest parity in formulating your answer

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Suppose that interest parity does not hold exactly, but that the true relationship is R = R* + (E e -E)/E + p , where

Suppose that interest parity does not hold exactly, but that the true relationship is R = R* + (E^e-E)/E + p , where p is a term measuring the differential riskiness of domestic versus foreign deposits. Suppose a permanent rise in domestic government spending, by creating the prospect of future government deficits, also raises , that is, makes domestic currency deposits more risky. Evaluate the policy's output effects in this situation.
Based on our discussion of a fixed exchange rate, how sustainable is a USD-pegged cryptocurrency.Review the content from the following link: Winklevoss Brothers and Pegged Cryptocurrency and discuss the potential threats and advantages of having a USD backed cryptocurrency.Utilizes any and all graphs from class when answering.
If a government initially has a balanced budget but then cuts taxes, it is runninga deficit that it must somehow finance. Suppose people think the government will finance its deficit by printing the extra money it now needs to cover its expenditures.Would you still expect the tax cut to cause a currency appreciation?
If a country changes its exchange rate, the value of its foreign reserves, measured in the domestic currency, also changes. This latter change may represent a domestic currency gain or loss for the central bank. What happens when a country devalues its currency against the reserve currency? When it revalues? How might this factor affect the potential cost of holding foreign reserves? Make sure to consider the role of interest parity in formulating your answer.