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    International Economics Study Set 9
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    Exam 15: Exchange Rates II: the Asset Approach in the Short Run
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    If UIP Holds, the Foreign Interest Rate Is 10%, and the Home
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If UIP Holds, the Foreign Interest Rate Is 10%, and the Home

Question 119

Question 119

Multiple Choice

If UIP holds, the foreign interest rate is 10%, and the home currency is expected to depreciate by 4%, then the home interest rate is:


A) 4%.
B) 6%.
C) 10%.
D) 14%.

Correct Answer:

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