​Assume That the U

question 52

Multiple Choice

​Assume that the U.S. and Chile nominal interest rates are equal. Then, the U.S. nominal interest rate decreases while the Chilean nominal interest rate remains stable. According to the international Fisher effect, this implies expectations of ____ than before, and that the Chilean peso should ____ against the dollar.

• A) ​lower U.S. inflation; depreciate
• B) ​lower U.S. inflation; appreciate
• C) ​higher U.S. inflation; depreciate
• D) ​higher U.S. inflation; appreciate

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Definitions:

Market Success

The achievement of desired sales, profit margins, and market share goals within a targeted market or industry.

Dummy Corporation

An entity created to serve as a front or to conceal the true nature of a business transaction, often for legal or financial reasons, without engaging in any real business activities.

Financial Losses

The negative impact on an entity's finances, typically resulting from poor investment decisions, business failures, or unforeseen expenses.

Strategy

A plan of action designed to achieve a long-term or overall aim, often involving resource allocation in competitive environments.