Assume that the United States invests heavily in government and corporate securities of New Zealand. In addition, residents of New Zealand invest heavily in the United States. Approximately $10 trillion on worth of investment transactions occur between these two countries each year. The total dollar value of trade transactions per year is about $18 trillion. Then ---- directly influences their exchange rate the most. inflation differentials only income differentials only inflation and income differentials inflation and interest rate differentials interest rate differentials Assume that the United States invests heavily in government and corporate securities of New Zealand. In addition, residents of New Zealand invest heavily in the United States. Approximately $10 trillion on worth of investment transactions occur between these two countries each year. The total dollar value of trade transactions per year is about $18 trillion. Then ---- directly influences their exchange rate the most. inflation differentials only income differentials only inflation and income differentials inflation and interest rate differentials interest rate differentials