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The following graph plots the percentage change in the spot rate for a foreign currency along the horizontal axis, while
Posted: Wed Mar 30, 2022 3:46 pm
by answerhappygod
- The Following Graph Plots The Percentage Change In The Spot Rate For A Foreign Currency Along The Horizontal Axis While 1 (22 KiB) Viewed 47 times
The following graph plots the percentage change in the spot rate for a foreign currency along the horizontal axis, while measuring the interest rate differential (between a home country and a foreign country) along the vertical axis, la refers to the interest rate in the home country, while iç refers to the interest rate in a foreign country. On the following graph, use the blue ine (circle symbol) to ploe the combinations of percentage change of the foreign currency spot rate and interest rate differential that are consistent with the international Fisher effect (IFE) theory 7 . 5 IFE Line 3 2 ih (%) - -3 5 -5 . 76521 1 2 3 4 5 6 7 Change in Foreign Currency Spot Rate(%)