The International Fisher Effect Is Valid in the Long Run

question 71

Multiple Choice

The international Fisher effect is valid in the long run because:

• A) inflation rates are equal in different countries.
• B) investors will move their money into countries with high real interest rates.
• C) investors will move their money into countries with high nominal interest rates.
• D) investors will move their money into countries with low inflation.

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Definitions:

Conditional

A statement in logic that asserts if one thing is true, then another will follow.

Truth Values

In logic, the assignment of truth or falsity to propositions, typically modeled as 'true' or 'false'.

Main Connective

The logical operator in a compound statement that determines the statement's overall truth value.

Conditionals

Conditionals are if-then propositions in logic and natural language, expressing a conditional or hypothetical relationship between antecedent and consequent.