Truel False/ uncertain 6. The rate of nominal depreciation is faster, the higher is the home coun- try's inflation rate
Posted: Mon May 02, 2022 8:09 am
Truel False/ uncertain 6. The rate of nominal depreciation is faster, the higher is the home coun- try's inflation rate relative to that of the foreign country and the faster is its rate of real depreciation. 7. Higher government debt in a small open economy is associated with lower net foreign assets. 9. Based on purchasing power parity the Canadian dollar is currently un- dervalued. 10. The forward exchange rate may contain a risk premium, and so it deviates from the market's expectation of the future nominal exchange rate.