The ________ states that for any two countries, the spot exchange rate should change in an equal amount but in the opposite direction to the difference in nominal interest rates between the two countries.

Question

Quizplus · Accepted Answer

The international Fisher effect suggests that the currency of a country with a higher nominal interest rate will depreciate against the currency of a country with a lower nominal interest rate, reflecting the difference in interest rates.

The ________ States That for Any Two Countries, the Spot