Suppose that the interest rate on dollar accounts is equal to 2% (i$ = 0.02), the interest rate on polish zloty accounts is equal to 4.5% (izł = 0.045), and the expected exchange rate between the dollar and the zloty one year from now is ee = 4 zł/$. assume that the (uncovered) interest parity holds. what would the spot rate, e, be if the expected exchange rate remains the same and the interest rate on polish assets declines to izł = 0.02? (answer in zł/$.)

Wo firms, a and b, each currently dump 50 tons of chemicals into the local river. the government has decided to reduce the pollution and from now on will require a pollution permit for each ton of pollution dumped into the river. it costs firm a $100 for each ton of pollution that it eliminates before it reaches the river, and it costs firm b $50 for each ton of pollution that it eliminates before it reaches the river. the government gives each firm 20 pollution permits. government officials are not sure whether to allow the firms to buy or sell the pollution permits to each other. what is the total cost of reducing pollution if firms are not allowed to buy and sell pollution permits from each other? what is the total cost of reducing pollution if the firms are allowed to buy and sell permits from each other? a. $3,000; $1,500 b. $4,500; $3,500 c. $4,500; $4,000 d. $4,500; $2,500