If the expected inflation rate in Canada is higher than the expected inflation rate in the United States, the Canadian dollar is expected to Blank 1 compared with the U.S. dollar. The name for this principle is the Blank 2. Similarly, if the expected nominal interest rate in the U.S. is lower than the expected nominal interest rate in Canada, the U.S. dollar is expected to Blank 3 compared with the Canadian dollar. This is called the Blank 4.
Blank 1
Blank 2
Blank 3
Blank 4
