74A) According to the International Fisher Effect, if Currency A has a home country that is expected to have a ________________ future interest rate than the country of Currency B's expected interest rate, then Currency A will be expected to ________ against Currency B.

Select one:

a. lower, depreciate

74B)

If the future inflation rates in the U.S. and France in January 1991 were expected to be 4% and 7% per annum, respectively, then, according to purchasing power parity, the future euro to U.S. dollar spot rate in 3 years ___.

Select one:

a. would be grounds to apply for aid from the International Monetary Fund

b. would remain unchanged

c. would depreciate against the U.S. dollar

d. would appreciate against the U.S. dollar

b. lower, remain unchanged

c. higher, appreciate

d. higher, depreciate