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Q. Discusses the effects of a rise in the interest rate paid by euro deposits on the exchanger rate.
Answer: For a known U.S. interest rate and a given expectation with observe to the future exchange rate a rise in the interest rate paid by euro deposits causes the dollar to depreciate.
It is often argued that firms compete only through diversifying their prices. Do you agree with this view? Justify your answer using examples / case studies form the Greek and/or t
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