Question
What is a structural deficit?
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Answer
The deficit that would exist at full employment.
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Question
In a P/B quote, how do you identify that the base currency is at a forward discount?
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Answer
F<S in P/B terms.
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Question
Under covered interest parity, which currency tends to trade at a forward discount?
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Answer
The higher interest rate currency.
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Question
What does a positive annualized forward premium in a P/B quote mean?
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Answer
Currency P trades at a forward premium to currency B.
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