What Would You Expect to Occur If the Rate of Expected

question 25

Multiple Choice

What would you expect to occur if the rate of expected inflation in the United States is considerably lower than expected inflation in Germany?

• A) The expected spot rate of €/$ will increase.
• B) The current spot rate of €/$ will increase.
• C) The dollar should appreciate against the euro.
• D) The dollar should depreciate against the euro.

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