A. fisher effect
B. Leontief paradox.
C. combined equilibrium theory.
D. purchasing power parity
✅ The correct answer is option A.
Differences in nominal interest rates are removed in exchange rate is fisher effect. The Fisher Effect is an economic theory created by economist Irving Fisher that describes the relationship between inflation and both real and nominal interest rates. The Fisher Effect states that the real interest rate equals the nominal interest rate minus the expected inflation rate.
Differences in nominal interest rates are removed in exchange rate is fisher effect. The Fisher Effect is an economic theory created by economist Irving Fisher that describes the relationship between inflation and both real and nominal interest rates. The Fisher Effect states that the real interest rate equals the nominal interest rate minus the expected inflation rate.