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

Question

Quizplus · Accepted Answer

The International Fisher Effect suggests that the spot exchange rate between two currencies will change if there are differences in the nominal interest rates between the two countries. This change is expected to be in the opposite direction to the interest rate differential.

The International Fisher Effect States That for Any Two Countries,the