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Assume that Australian and New Zealand nominal interest rates are equal. Then, the Australian nominal interest rate decreases while the New Zealand nominal interest rate
Assume that Australian and New Zealand nominal interest rates are equal. Then, the Australian nominal interest rate decreases while the New Zealand nominal interest rate remains stable. According to the international Fisher effect, this implies expectations of ____ than before, and that the New Zealand dollar should ____ against the Australian dollar. a. lower Australian inflation; appreciate b. lower Australian inflation; depreciate c. higher Australian inflation; appreciate d. higher Australian inflation; depreciate
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