Which of the Following Statements Is True with Respect to the Monetary

Multiple Choice

Which of the following statements is true with respect to the monetary approach to the balance of payments:

A) the interest differential in favor of the dollar equals the expected rate of appreciation of the euro
B) the interest differential in favor of the dollar equals the expected rate of depreciation of the dollar
C) the interest differential in favor of the pound equals the expected rate of depreciation of the pound
D) all of the above