The Principle That a Difference in Nominal Interest Rates Supported

question 104

Multiple Choice

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 ________.

• A)Guidotti-Greenspan rule
• B)international Fisher effect
• C)comparative advantage theory
• D)efficient market view principle

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Definitions:

Unlimited Liability

A legal structure in some businesses where owners are personally responsible for all of the company's debts, exposing personal assets to business creditors.

Written Agreement

A formal document that outlines the terms and conditions of a contract or agreement between two or more parties.

Revenue Recognition

The accounting principle that dictates how and when revenue is acknowledged in the financial statements, typically when it is earned and realizable.

Goods Or Services

Products or activities offered by a business to meet the needs or wants of customers, often classified as tangible or intangible respectively.