Problem
Explain how the nominal dollarkuro exchange rate would be affected (all else equal) by permanent changes in the expected rate of real depreciation of the dollar against the CUM? Can you suggest an event that would cause a country's nominal interest rate to rise and its currency to appreciate simultaneously, in a world of perfectly flexible prices?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.