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1) If the interest rates are .02 and .05 in Argentina and Canada respectively, what will happen to the peso versus the Canadian dollar, if

1) If the interest rates are .02 and .05 in Argentina and Canada respectively, what will happen to the peso versus the Canadian dollar, if presently they exchange as 100 pesos for one dollar? Explain the concept of IFE with the aforementioned problem.( Explain the international fisher effect and apply it to this example.)

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