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Assumethe nominal interest rates in the United States and Canada are 8 percent and 12 percent, respectively. The real interest rates are the same, and
Assumethe nominal interest rates in the United States and Canada are 8 percent and 12 percent, respectively. The real interest rates are the same, and the real exchange rate is fixed.As a result,the market's expectation about the number of Canadian dollars to be received for a U.S. dollar a year from now will be that it will ___________.
A.decrease by 4 percent
B.increase by 4 percent
C.increase by 5 percent
D.decrease by 8 percent
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