In the international context, the ________ interest rate involves only the MNC parent's currency, while the ________ interest rate includes any forecast appreciation or depreciation of a foreign currency relative to that of the MNC parent.
A) effective; nominal
B) macro; nominal
C) nominal; effective
D) nominal; micro

Question

Quizplus · Accepted Answer

The first blank refers to the nominal interest rate, which is the interest rate that involves only the MNC parent's currency. The second blank refers to the effective interest rate, which includes any forecast appreciation or depreciation of a foreign currency relative to that of the MNC parent. Therefore, choice C is the best option as it matches the definitions given in the question.

In the International Context, the ________ Interest Rate Involves Only