The Principle That a Difference in Nominal Interest Rates Supported

question 62

Short Answer

The principle that a difference in nominal interest rates supported by two countries' currencies will cause an equal but opposite change in their spot exchange rates is called the ________.

---

Definitions:

Thyroid Gland

A butterfly-shaped gland located at the front of the neck, producing hormones that regulate metabolism, energy generation, and growth.

Pancreas

A glandular organ in the digestive system that produces enzymes to digest food and hormones such as insulin to regulate blood sugar.

Adrenal Cortex

A layer of the adrenal gland responsible for producing steroid hormones, including cortisol and aldosterone.

Adrenal Medulla

The inner part of the adrenal gland that secretes adrenaline and noradrenaline, hormones that help the body respond to stress.