Question: The Fisher effect states that a) an increase (decrease) in the expected inflation rate in a country will cause a proportionate increase (decrease) in the

The Fisher effect states that

a) an increase (decrease) in the expected inflation rate in a country will cause a proportionate increase (decrease) in the interest rate in the country.

b)the nominal interest rate differential reflects the expected change in the exchange rate.

C) any forward premium or discount is equal to the expected change in the exchange rate.

d) any forward premium or discount is equal to the actual change in the exchange rate.

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