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The fisher effect suggests that nominal interest rates differ between countries because of the differences in the respective rates of inflation. According to the Fisher
The fisher effect suggests that nominal interest rates differ between countries because of the differences in the respective rates of inflation. According to the Fisher effect and your examination of the oneyear Eurocurrency interest rates presented in Exhibit order the currencies from the four countries from highest to lowest in terms of the size of the inflation premium embedded in the nominal ask interest rates for January
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