This is a 20 minutes exercise. Answer True, False or Uncertain questions and explain. Remember, all points are awarded for your explanation. a. Interest rate parity means that real interest rate

This is a 20 minutes exercise.

Answer True, False or Uncertain questions and explain. Remember, all points are awarded for your explanation.

a. Interest rate parity means that real interest rates in all countries are the same.

Answer: 

b. Interest rate parity means nominal interest rates in all countries are the same.

Answer:

c. Relative purchasing power parity means inflation rates are the same in all countries in the long run.

Answer:

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