What is the difference between international money markets and international capital markets()
A. the length of maturities for the instruments
B. the risk premium of the instruments in the market
C. the direction of financial flows in the market
D. the countries that participate in the markets
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In 2008, several of the world’s central bank actively worked together to push down global interest rates. This is an example of()
A. international policy coordination
B. international policy cooperation
C. international policy externalities
D. structural interdependence
An example of an international policy externality is()
A. the locomotive effect
B. the liquidity effect
C. the monetary effect
D. sterilization
When two countries choose to use a new currency, they are()
A. participating in a monetary union
B. dollarizing
C. forming an optimal currency area
D. increasing their monetary autonomy
If covered interest parity holds then()
A. the difference between two countries’ interest rates should roughly equal the forward discount or premium between their currencies
B. international interest rates should be equal
C. firm should be able to identify opportunities for arbitrage in investments
D. forward rates should equal spot rates