Under Conditions of Interest Rate Parity (IRP), a Country with a Relatively

Multiple Choice

Under conditions of interest rate parity (IRP) , a country with a relatively _______ higher nominal interest rate will have its currency _______ relative to a country with a relatively _______ nominal interest rate.

A) higher, depreciate, lower
B) lower, depreciate, higher
C) higher, appreciate, lower
D) lower, appreciate, higher.