The principle that a difference in nominal interest rates supported by two countries' currencies will cause an equal but opposite change in their spot exchange rates is called the ________.

Question

Quizplus · Accepted Answer

The principle described in the question is known as the international Fisher effect, which suggests that the difference in nominal interest rates will result in an equal but opposite change in the spot exchange rates. The other options listed are unrelated to this principle.

The Principle That a Difference in Nominal Interest Rates Supported