Figure 12.1 The Market for Francs
-Refer to Figure 12.1.Should Swiss labor productivity rise, leading to a decrease in Swiss manufacturing costs, there would occur a(n)

Question

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Figure 12.1 The Market for Francs 
-Refer to Figure 12.1.Should Swiss labor productivity rise, leading to a decrease in Swiss manufacturing costs, there would occur a(n)

Quizplus · Accepted Answer

An increase in Swiss labor productivity, leading to decreased manufacturing costs, would make Swiss goods more competitive internationally. This would increase demand for Swiss exports, thereby increasing demand for francs to pay for these goods. As demand for francs increases, the value of the franc would appreciate relative to other currencies, such as the dollar, leading to a depreciation of the dollar.

​ Figure 12.1 the Market for Francs

Figure 12.1 the Market for Francs