Answered

Discover the best answers at Westonci.ca, where experts share their insights and knowledge with you. Join our platform to connect with experts ready to provide precise answers to your questions in various areas. Get quick and reliable solutions to your questions from a community of experienced experts on our platform.

Interest rate differences between countries depend on Group of answer choices neither differences in expected inflation, nor on expected changes in the real exchange rate. differences in expected inflation, but not on expected changes in the real exchange rate. differences in expected inflation, and on expected changes in the real exchange rate. differences in expected changes in the real exchange rate, but not on expected inflation. differences in expected inflation and nothing else.

Sagot :

Answer:

Differences in expected inflation, and on expected changes in the real exchange rate.

Explanation:

Interest rate is the rate charged by a lender on monies borrowed

For example if 100 is borrowed, and the lender expects the borrower to pay 10 every month. The interest rate = (10/100) = 10%

According to the taylor equation

(1 + Nominal interest rate) = ( 1 + real interest rate) + (1 + inflation rate)

the higher the real interest rate and inflation rate, the higher the nominal interest rate

Real interest rate is interest rate less inflation rate

Nominal interest rate includes inflation rate

We hope this was helpful. Please come back whenever you need more information or answers to your queries. We hope this was helpful. Please come back whenever you need more information or answers to your queries. Get the answers you need at Westonci.ca. Stay informed by returning for our latest expert advice.