The following mathematical representation represents the Fisher effect theory of exchange rate determination.
S(et)= (1+infD)?
S(e?)(1+infF)?

Question

Quizplus · Accepted Answer

The Fisher effect primarily relates to interest rates and inflation, and not directly to exchange rate determination. It suggests that the real interest rate is unaffected by monetary measures in the long term, focusing on the relationship between nominal interest rates and inflation rather than exchange rates.

The Following Mathematical Representation Represents the Fisher Effect Theory of Exchange