According to the International Fisher Effect, the Forecast Change in the Spot

question 19

Multiple Choice

According to the International Fisher Effect, the forecast change in the spot rate between two countries is equal to:

• A) the current spot rate multiplied by the ratio of the inflation rates in the respective countries.
• B) but the opposite sign to the difference between nominal interest rates.
• C) but the opposite sign to the difference between inflation rates.
• D) but the opposite sign to the difference between real interest rates.

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