Assume That the One-Year Interest Rate in the U

question 55

Multiple Choice

Assume that the one-year interest rate in the U.S. is 7% and in the U.K. is 5%. According to the international Fisher effect, British pound's spot exchange rate should ____ by about ____ over the year.

• A) depreciate; 1.9%
• B) appreciate; 1.9%
• C) depreciate; 3.94%
• D) appreciate; 3.94%

---

Definitions:

Arbitration Clauses

Provisions within a contract that require disputes to be resolved through arbitration rather than through court litigation.

National Domain

The total area or digital presence under the control of a specific nation, including its land, waters, and cyber territory.

Interstate Commerce

Commercial transactions or movement of goods and services across state lines, regulated by federal laws.

Arbitration Agreements

Legal contracts in which parties agree to resolve disputes through arbitration rather than through court litigation.