Under a system of floating exchange rates,the Swiss franc would depreciate in value if which of the following occurs?
A) Price inflation in France
B) An increase in U.S.real income
C) A decrease in the Swiss money supply
D) Falling interest rates in Switzerland

Question

Quizplus · Accepted Answer

Falling interest rates in Switzerland would make Swiss assets less attractive to investors, leading to a decrease in demand for the Swiss franc and causing it to depreciate.

Under a System of Floating Exchange Rates,the Swiss Franc Would