________________________________ is the condition when interest rates have adjusted so that interest rates between countries differ only by the expected appreciation of depreciation of the currency.
A)Interest rate parity.
B)Special drawing rights (SDRs).
C)Purchasing power parity.
D)Revaluation.

Question

Quizplus · Accepted Answer

Interest rate parity refers to the equilibrium condition in which the interest rates between two countries differ only by the expected appreciation or depreciation of the currency. This means that investors would earn the same return on their investments regardless of where they invest, after adjusting for exchange rate changes. Thus, interest rate parity serves as a critical concept in international finance and helps explain why exchange rates fluctuate over time.

________________________________ Is the Condition When Interest Rates Have Adjusted So