Which of the following states that the country with the higher interest rate should have the higher inflation?
A) the Fisher Effect
B) the International Fisher Effect
C) the Interest Rate Inflation Theory
D) the Forward rate theory
Answer: A
Learn More :
Multinational Business Chapter 9
- According to the text, which currency is expected to experience the most change in the upcoming years?
- Which of the following most accurately describes the economic situation in El Salvador?
- Endaka, the "high yen," caused financial problems for ________.
- If the euro continues to remain strong against the U.S. dollar, which of the following strategies would make the most sense for BMW?
- Which of the following accurately explains how producers are affected by exchange rate changes?
- Ray, a marketer at a global firm, monitors the exchange rate of countries in which the firm sells its products. Ray is most likely concerned about changes in ________.
- Tanya is a manager at a global firm that has operations located in Brazil, India, and Japan. Tanya is in the process of making a fundamental analysis in order to forecast exchange rates in each country. Which of the following is a confidence factor that Tanya should consider in trying to predict exchange rate movements in each country?
- Tanya is a manager at a global firm that has operations located in Brazil, India, and Japan. Tanya is in the process of making a fundamental analysis in order to forecast exchange rates in each country. Which of the following questions is most relevant to Tanya?
- Craig, a manager at a global firm, is studying the cyclical nature of growth and employment as a part of the process to forecast exchange rates. Which factor is Craig most likely monitoring?
- Shelly, a manager at a global firm, is studying the foreign currency intervention practices of Indonesia. Shelly is most likely examining ________ factors.
- Many economists have predicted that Hong Kong will change its currency system to the ________.
- In a country with a currency that is not freely floating, the timing of an exchange rate change is often a ________ decision.
- It is easier to predict the ________ of a change than the ________ of a change in exchange rates.
- Forecasters must predict the magnitude, direction, and ________ of an exchange rate change or movement.
- Research has shown that past exchange rates are an accurate predictor of future exchange rates ________.
- A technical forecaster is also known as a ________.
- Sarah, a manager at Farley Enterprises, an MNE with operations in Asia, Europe, and North America, is using past trends in exchange rate movements to spot future trends. Which type of forecasting approach is Sarah most likely using?
- Ted, a manager at Global Manufacturing, is analyzing trends in economic variables to predict future exchange rates that might affect the MNE's international operations. Which of the following is Ted most likely doing?
- If the real interest rate is 5%, the rate of inflation in the United States is 6%, and the rate of inflation in the United Kingdom is 3%, which of the following statements would NOT be true?
- The International Fisher Effect implies that ________.
- The International Fisher Effect ________.
- If a Big Mac costs $3.41 in the United States and $2.67 in Argentina (the price of a Big Mac in Argentine pesos converted into dollars at the spot exchange rate), which of the following is most likely true?
- According to purchasing power parity, if the domestic inflation rate is ________ than that in the foreign country, the domestic currency should be ________ than that of the foreign country.
- Which of the following statements best describes a limitation of the Big Mac Index?
If the answers is incorrect or not given, you can answer the above question in the comment box. If the answers is incorrect or not given, you can answer the above question in the comment box.