Assume forex market equilibrium is given by i=([1/E]-1)+0.1, where the two foreign return terms on the right are expected depreciation and the foreign interest rate. What is the foreign interset rate? What is the expected future exchange rate?

Assume forex market equilibrium is given by i=([1/E]-1)+0.1, where the two foreign return terms on the right are expected depreciation and the foreign interest rate. What is the foreign interset rate? What is the expected future exchange rate?
Continuing the last question, solve for the IS curve: obtain an expression for Y in term of i, G and T(eliminate E).

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Assume forex market equilibrium is given by i=([1/E]-1)+0.1, where the two foreign return terms on the right are expected depreciation and the foreign interest rate. What is the foreign interset rate? What is the expected future exchange rate?
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