Homework Assignment – 7

Why does a balance-of-payments deficit for the United States have a different effect on its international reserves than a balance of payments deficit or the Netherlands? ... Or you can take your EUR, convert it into 1.3 dollars today and deposit it for a year. It will be worth 1.3*1.02 = 1.326 USD. Thus the exchange rate in a years time must be: ................
................