If a foreign currency consistently depreciated against the dollar over several periods and had lower interest rates at the beginning of those periods than the U.S. interest rates, then:

Question

If a foreign currency consistently depreciated against the dollar over several periods and had lower interest rates at the beginning of those periods than the U.S. interest rates, then:​

Quizplus · Accepted Answer

If a foreign currency depreciated against the dollar and had lower interest rates, U.S. firms would likely achieve a lower effective yield on foreign deposits due to currency depreciation. The international Fisher effect, which suggests that currencies with lower interest rates will depreciate, is not supported if the currency consistently depreciated.

If a Foreign Currency Consistently Depreciated Against the Dollar Over