Order the answer to: Suppose the dollar interest rate and the pound sterling interest

Academic Help business economics Order the answer to: Suppose the dollar interest rate and the pound sterling interest

business economics

Order the answer to: Suppose the dollar interest rate and the pound sterling interest

Question Suppose the dollar interest rate and the pound sterling interest rate are the same, 5 percent per year. What is the relation between the current equilibrium $/£ and its expected future level? Suppose the expected future$/£exchange rate, $1.52 per pound, remains constant as Britain’s interest rate rises to 10 percent per year. If the U.S. interest rate also remains constant, what is the new equilibrium$/£exchange rate?
Subject business economics
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