If the interest rate on a bank deposit in the United States is 3 percent while a similar deposit earns 6 percent in Britain, then we could expect that deposits would flow to
A) Britain regardless of exchange rate expectations.
B) the United States regardless of exchange rate expectations.
C) Britain if the pound is expected to depreciate less than 3 percent.
D) Britain if the pound is expected to depreciate more than 3 percent.
E) the United States if the dollar is expected to appreciate less than 3 percent.
Correct Answer:
Verified
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