In late 2010 the National Bank of Australia offered a 4 percent interest rate on a savings account while Bank of America offered 2 percent. This difference means that
A) there will be a surplus of U.S. dollars in the foreign exchange market.
B) people expect the U.S. dollar to appreciate by 2 percent against the Australian dollar and interest rate parity to occur.
C) there will be a shortage of Australian dollars in the foreign exchange markets.
D) people expect the U.S. dollar to appreciate to 8 percent against the Australian dollar and interest rate parity to occur.
Correct Answer:
Verified
Q390: Q391: In October 2008, Icelandʹs central bank increased Q392: Q393: In October 2008, Icelandʹs central bank increased Q394: In June 2008, $1 bought 0.5 pounds Q396: In October 2008, Icelandʹs central bank increased Q397: Suppose the United States initially has a Q398: In June 2008, the dollar bought 1.6 Q399: As a result of the 2008-2009 financial Q400: In 2007, the U.S. sold $73 million![]()
![]()
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents