11. Suppose the interest rate in $- denominated deposits is P = 0.04, the interest rate on £-denominated deposits is - = 0.03, and the current exchange rate (e = #$/£1) is e = 2.0. Then if the interest- parity condition holds, we could say that the expected future exchange rate, eexp, is Group of answer choices 2.1. none of the other options. 2.02. 1.98. 1.8.

11. Suppose the interest rate in $- denominated deposits is P = 0.04, the interest rate on £-denominated deposits is - = 0.03, and the current exchange rate (e = #$/£1) is e = 2.0. Then if the interest- parity condition holds, we could say that the expected future exchange rate, eexp, is Group of answer choices 2.1. none of the other options. 2.02. 1.98. 1.8.

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter13: Open-economy Macroeconomics: Basic Concepts

Section: Chapter Questions

Problem 5CQQ

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