CristinaTerra, inPrinciples of International Finance and Open Economy Macroeconomics, 2015 Exercise 1 Suppose thenominal interest rateon a 1-year US bond is 5% and the nominal interest rate in Mexico for a bond of the same maturity is 10%. The current exchange rate in the spot exchange rate...
Inflation rate: In macroeconomics, the inflation rate is the increment in the general price level of a bunch of services and products in an economy during a given period. It is estimated by a percentage rise in the price level. Answer and Explanation: ...
Calculations to convert the nominal rate to real interest rate are made easy with a formula known as the Fisher equation. Irving Fisher, an American economist, was a great contributor to the development of modern monetary theory. He believed that interest rates result from two influences: the pe...
We can illustrate this with a simple formula: GDP = VOGS – IC 2. How do you calculate GDP using the income approach? This method focuses on the sum of primary incomes (from labor, capital, land, and profit) to estimate GDP. To receive national income all income from interest rent lab...
Is the relationship between the inflation rate and changes in the quantity of money related to microeconomics or macroeconomics? Explain. Define the following term: Inflation rate. If the CPI was 122.3 at the end of last year and 124.5 at the end ...