Sulsa Inc. uses fundamental forecasting. Using regression analysis, it has determined the following equation for the euro: euro_t
= b₀ + b₁INF_t _- ₁ + b₂INC_t _- ₁

= ) 005 + .9INF_t _- ₁ + 1.1INC_t _- ₁

The most recent quarterly percentage change in the inflation differential between the United States and Europe was 2 percent, while the most recent quarterly percentage change in the income growth differential between the United States and Europe was -1 percent. Based on this information, the forecast for the euro is a(n) ____ of ____ percent.

Question

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The Answer of Sulsa Inc. uses fundamental forecasting. Using regression analysis, it has determined the following equation for the euro: euro_t = b₀ + b₁INF_t _- ₁ + b₂INC_t _- ₁ = )005 + .9INF_t _- ₁ + 1.1INC_t _- ₁ The most recent quarterly percentage change in the inflation differential between the United States and Europe was 2 percent, while the most recent quarterly percentage change in the income growth differential between the United States and Europe was -1 percent. Based on this information, the forecast for the euro is a(n) ____ of ____ percent. A) appreciation; 3.4 B) depreciation; 3.4 C) appreciation; 0.7 D) appreciation; 1.2

Sulsa Inc Uses Fundamental Forecasting