Adjusted for peoples expectation of inflation

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Reference no: EM13995760

If the U.S. interest rate, adjusted for people's expectation of inflation, increases sharply relative to the rest of the world, then

A. The dollar will depreciate

B. There will be no change in the demand for dollars in foreign exchange markets but there will be an increase in demand for foreign currency

C. there will be a decrease in the demand for dollars in foreign exchange markets

D. the dollar will appreciate

Reference no: EM13995760

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