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If USNominal Interest Rate Is Lower Than U

Question 10

Multiple Choice

If U.S.nominal interest rate is lower than U.K.interest rate (assuming real interest rate stays same between the countries) ,you can say that:


A) US$ is expected to depreciate.
B) US$ is expected to appreciate.
C) PPP is violated but RPPP may be satisfied.
D) RPPP is violated.

Correct Answer:

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