If USNominal Interest Rate Is Lower Than U

question 30

Multiple Choice

If U.S.nominal interest rate is lower than U.K.interest rate (assuming real interest rate stays same between the countries) ,you can say that:

• A) US$ is expected to depreciate.
• B) US$ is expected to appreciate.
• C) PPP is violated but RPPP may be satisfied.
• D) RPPP is violated.

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