True or False or uncertainty Uncovered interest parity (UIRP) implies that the market expects the currencies of countries with relatively higher interest rates to lose value. 11. If exports are payable in dollars, while imports require payment in for- eign currency, a change in the nominal exchange rate automatically transfers into a change in the price of imported goods relative to local goods. 12. Eurobanking have grown rapidly because of lack of regulation and con- sequent opportunity for Eurobanks to pay slightly higher deposit rates and make international loans at slightly lower loan rates.
True or False or uncertainty Uncovered interest parity (UIRP) implies that the market expects the currencies of countries with relatively higher interest rates to lose value. 11. If exports are payable in dollars, while imports require payment in for- eign currency, a change in the nominal exchange rate automatically transfers into a change in the price of imported goods relative to local goods. 12. Eurobanking have grown rapidly because of lack of regulation and con- sequent opportunity for Eurobanks to pay slightly higher deposit rates and make international loans at slightly lower loan rates.
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 8PA
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