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3. According to relative PPP, if the U.S. interest rate is 9% and the Eurozone interest rate is 5%, then in the long run we would expect: A) the dollar to appreciate. B) the dollar to depreciate. C) the euro to appreciate. D) no change in the exchange rate.   4. Which of the following are explanations for sticky prices: A) long-term labor contracts. B) fixed exchange rates. C) menu costs. D) long-term labor contracts and menu cost

3. According to relative PPP, if the U.S. interest rate is 9% and the Eurozone interest rate is 5%, then in the long run we would expect: A) the dollar to appreciate. B) the dollar to depreciate. C) the euro to appreciate. D) no change in the exchange rate.   4. Which of the following are explanations for sticky prices: A) long-term labor contracts. B) fixed exchange rates. C) menu costs. D) long-term labor contracts and menu cost

Exploring Economics
Exploring Economics
8th Edition
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:Robert L. Sexton
Chapter29: International Finance
Section: Chapter Questions
Problem 8P
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3. According to relative PPP, if the U.S. interest rate is 9% and the Eurozone interest rate is 5%, then in the long run we would expect:

A) the dollar to appreciate.

B) the dollar to depreciate.

C) the euro to appreciate.

D) no change in the exchange rate.

 

4. Which of the following are explanations for sticky prices:

A) long-term labor contracts.

B) fixed exchange rates.

C) menu costs.

D) long-term labor contracts and menu costs

Please answer both sir i will rate

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