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For the United States, suppose the annual interest rate on government securities equals 8

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 equals 10 percent while the annual inflation rate equals 7 percent. The above variables would cause investment funds to flow from:

a. the United States to Switzerland, causing the dollar to depreciate

b. the United States to Switzerland, causing the dollar to appreciate

c. Switzerland to the United States, causing the franc to depreciate

d. Switzerland to the United States, causing the franc to appreciate

Nov 23 2019 View more View Less

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