Differences in nominal interest rates are removed in exchange rate is
A. fisher effect
B. Leontief paradox.
C. combined equilibrium theory.
D. purchasing power parity
Answer: Option A
Solution (By Examveda Team)
Differences in nominal interest rates are removed in exchange rate is fisher effect. The Fisher Effect is an economic theory created by economist Irving Fisher that describes the relationship between inflation and both real and nominal interest rates. The Fisher Effect states that the real interest rate equals the nominal interest rate minus the expected inflation rate.This Question Belongs to Management >> International Finance And Treasury
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