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Economics Mcqs
Q
For the United States suppose the annual interest rate on government securities equals 8 percent while the annual inflation rate equals 4 percent, For Switzerland the annual interest rate on government securities equal 10 percent while the annual inflation rate equals 7 percent the above variables would cause investment funds to flow from ?
AA. The united states to switzerland causing the dollar to depreciate
BB. The united states to switzerland causing the dollar to appreciate
CC. Switzerland to the united states causing the franc to depreciate
DD. Switzerland to the united states causing the franc to appreciate
Correct Answer:
C. C. Switzerland to the united states causing the franc to depreciate