McqMate
| Q. |
If interest rates on the euro are consistently below U.S. interest rates, then for the international Fisher effect (IFE) to hold: |
| A. | the value of the euro would often appreciate against the dollar. |
| B. | the value of the euro would often depreciate against the dollar. |
| C. | the value of the euro would remain constant most of the time. |
| D. | the value of the euro would appreciate in some periods and depreciate in other periods, but on average have a zero rate of appreciation. |
| Answer» A. the value of the euro would often appreciate against the dollar. | |
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