Interest Rate Differences Between Countries Depend on

question 66

Multiple Choice

Interest rate differences between countries depend on

• A) differences in expected inflation, but not on expected changes in the real exchange rate.
• B) differences in expected changes in the real exchange rate, but not on expected inflation.
• C) neither differences in expected inflation, nor on expected changes in the real exchange rate.
• D) differences in expected inflation and nothing else.
• E) differences in expected inflation, and on expected changes in the real exchange rate.

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