Exam 17: The Foreign Exchange Market

________ in the domestic interest rate causes the demand for domestic assets to increase and the domestic currency to ________,everything else held constant.

The condition that states that the domestic interest rate equals the foreign interest rate minus the expected appreciation of the domestic currency is called

________ in the expected future domestic exchange rate causes the demand for domestic assets to shift to the ________ and the domestic currency to depreciate,everything else held constant.