
Database System Concepts
7th Edition
ISBN: 9780078022159
Author: Abraham Silberschatz Professor, Henry F. Korth, S. Sudarshan
Publisher: McGraw-Hill Education
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Computer Science
If PPP holds the pound has the same purchasing power in all countries. This means that the percentage change in the real exchange rate is zero. In essence the PPP implies that the real exchange rate is fixed! With this information, write down the expression for the expected change in nominal interest rate: What is the percentage change in nominal exchange rate?
Nominal interest rate - 8 (UK) 12 (Sweden)
Real interest rates in both countries are equal..
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