A nation has a lower inflation rate than all other nations

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Question about Floating exchange rate

A country has a lower inflation rate than all other countries, It has more rapid economic growth. The central bank does not intervene in the foreign exchange market. What can you say about each of the following (and why)?:

a. The exchange rate?
b. The current account balance?
c. The expected exchange rate?
d. The interest rate differential?
e. Interst rate parity?
f. Purchasing power equity?

 

Reference no: EM1330085

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