If Nominal British Interest Rates Are 3% and Nominal U

question 37

Multiple Choice

If nominal British interest rates are 3% and nominal U.S. interest rates are 6%, then the British pound (£) is expected to ____ by about ____%, according to the international Fisher effect (IFE) .

• A) depreciate; 2.9
• B) appreciate; 2.9
• C) depreciate; 1.0
• D) appreciate; 1.0
• E) none of the above

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