Assuming No Inflation and No Interest Rate Changes Abroad,which of the Following

Multiple Choice

Assuming no inflation and no interest rate changes abroad,which of the following would leave the spot market exchange rate essentially unchanged?

A) an increase in nominal interest rates from 4% to 5% when inflation is expected to rise from 0% to 1%
B) an increase in nominal interest rates from 6% to 8% when the consumer price index is expected to rise from 206 to 208
C) a reduction in nominal interest rates from 7% to 4% when the inflation rate is expected to be 3%
D) a decrease in bond prices by 1% when deflation of 1% is expected
E) a reduction of interest rates from 5% to 3% when the consumer price index is expected to rise from 103 to 105