When interest rate parity is used to determine the spot exchange rate (the demand supply...
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When interest rate parity is used to determine the spot exchange rate (the demand supply diagrams) which one of the following changes will, all other inputs remaining constant, make the exchange rate in terms of dollars per pound fall. (Nominal depreciation of the pound against the dollar)
| An increase in the US interest rate | ||
| An increase in the UK interest rate | ||
| An increase in the US inflation | ||
| An increase in the forward exchange rate (dollars per pound) |
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