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Q. What is the interest parity condition?
Answer: The circumstance that the expected returns on deposits of any two currencies are equal when measured in the same currency is called the interest parity condition. It involve that potential holders of foreign currency deposits view them as equally desirable assets that is risk is assumed away. In the notational forms:
R$ = RE + (Ee $/E - E$/E) / E$/E.
Explain why the exchange rate model based on PPP is a long-run theory. Answer: PPP theory is a financial approach to the exchange rate. It is a long-run theory for the reason
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I am writing a paper on dependancy theory in Ghana and I am having trouble understanding the basics of peripheral capitalism.
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