In your own words, explain interest rate parity.Do we observe interest rate parity in the real-world data (e.g. between Canada and the United

1. In your own words, explain interest rate parity. Do we observe interest rate parity in the real-world data (e.g. between Canada and the United States)?  Why or why not?

Explain how the relation between the real exchange rate and net exports explains the downward slope of the demand curve for foreign-currency exchange.