Answer:
The correct answer is letter "C": international Fisher effect.
Step-by-step explanation:
The International Fisher Effect is an approach that states the differences between the nominal interest rates of two countries can determine changes in the interest rates of those nations. According to the Fisher Effect, the higher the nominal interest rate of a country, the higher its inflation rate which provokes the nation's currency to depreciate.
This theory also establishes that the spot exchange rate (current price one currency is exchanged for another) fluctuates in an equal amount but opposite direction to the difference in nominal rates between two countries.