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If interest rates on the euro are consistently above U.S. dollar interest rates, then for the International Fisher Equation (IFE) to hold between the US
If interest rates on the euro are consistently above U.S. dollar interest rates, then for the International Fisher Equation (IFE) to hold between the US and the Eurozone, Purchasing power parity must hold between the dollar and the euro. O The nominal exchange rate for the euro will remain constant. The euro will appreciate against the dollar. o The euro will remain constant with respect to the dollar. The euro will depreciate against the dollar
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