Which of the following states that for any two countries,the spot exchange rate should change in an equal amount but in the opposite direction to the difference in nominal interest rates between the two countries?

Question

Quizplus · Accepted Answer

The International Fisher effect states that the spot exchange rate should change in an equal amount but in the opposite direction to the difference in nominal interest rates between two countries. This theory aims to explain the relationship between interest rates, inflation rates, and exchange rates in the long run.

Which of the Following States That for Any Two Countries,the