Using the concept of "carry trade," explain how a decrease in
U.S. interest rates could affect the EUR/USD exchange rate. Given
this change in exchange rate, how would firms and customers be
affected?
Using the concept of "carry trade," explain how a decrease in
U.S. interest rates could affect the EUR/USD exchange rate. Given
this change in exchange rate, how would firms and customers be
affected?
References to verify answer
Suppose that real interest rates decrease across Europe. This development will (Increase/Decrease) U.S. net capital outflow at all U.S. real interest rates, which in turn will cause the (Demand for/Supply of) loanable funds to (Increase/Decrease) because net capital outflow is a component of the relevant curve in the loanable funds market.
Explain the difference between nominal and real interest rates.
Assume current interest rates and that you have a loan for a
vehicle. You will have to look up current interest rates and the
inflation rate. What is your nominal and your real interest rate?
Calculate. Explain what might happen if the Federal Reserve
increases interest rates by .25 points. What is the impact on your
rate(s)?
Type your answer
Which of the following policy changes would decrease the real
interest rate?
A A tax cut on interest income
B A policy that decreases government consumption
expenditures
C A reduction in social security benefits
D All of the above
correct answer is D
need the explianation