Question 3A

Future spot exchange rate by IFE is:

S(t)1+ih1+if.{"version":"1.1","math":"S(t) \times \frac{1+i_h}{1+i_f}."}

Question 3B

Given a home country and a foreign country, international Fisher effect (IFE) suggests that:

Question options:

	a home currency will depreciate if the current foreign interest rate exceeds the current home interest rate.
	a home currency will appreciate if the current foreign inflation rate exceeds the current home inflation rate.
	a home currency will depreciate if the current foreign inflation rate exceeds the current home inflation rate.
	a home currency will appreciate if the current foreign interest rate exceeds the current home interest rate.

Question 3C

Assume that the U.S. inflation rate rate is higher than the New Zealand inflation rate. This will cause U.S. consumers to ____ their imports from New Zealand and New Zealand consumers to ____ their imports from the U.S. According to purchasing power parity (PPP), this will result in a(n) ____ of the New Zealand dollar (NZ$).

Question options:

	increase; increase; appreciation
	reduce; increase; appreciation
	increase; reduce; appreciation
	reduce; increase; depreciation