Given Floating Exchange Rates,assume That the Swiss Decrease Their Import

question 199

Multiple Choice

Given floating exchange rates,assume that the Swiss decrease their import purchases from Italy while at the same time the Italians increase their purchases of Swiss government securities.The first action by itself would lead to a (an) ____ of the franc against the lira while the second action by itself would lead to a (an) ____ of the franc against the lira.

• A) Appreciation,appreciation
• B) Depreciation,depreciation
• C) Appreciation,depreciation
• D) Depreciation,appreciation

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