Under the monetary approach to the exchange rate A) an interest rate

Under the monetary approach to the exchange rate

A) an interest rate decrease is associated with higher expected inflation and a currency that will be weaker on all future dates.
B) an interest rate increase is associated with higher expected deflation and a currency that will be weaker on all future dates.
C) an interest rate increase is associated with higher expected inflation and a currency that will be strengthened on all future dates.
D) an interest rate increase is associated with higher expected deflation and a currency that will be strengthened on all future dates.
E) an interest rate increase is associated with higher expected inflation and a currency that will be weaker on all future dates.

ANSWER

E