Everything else being the same, a decrease in the foreign interest rate _____ the U.S. net capital inflow and ____ the U.S. real interest rate.

Question 5 options:

	does not affect; does not affect
	does not affect; increases
	increases; decreases
	decreases; does not affect

According to the Fisher equation, to calculate the ex ante nominal interest rate, one has to add the real interest rate and the:

Question 6 options:

	expected inflation rate.
	exchange rate.
	actual inflation rate.
	real exchange rate.

According to the Fisher equation, if expected inflation rises by 1 percent the nominal interest rate:

Question 7 options:

	increases by the value of the real interest rate.
	falls by 1 percent.
	rises by 1 percent.
	stays the same.