Figure 11.1. Supply and Demand Schedules of Francs

-Refer to Figure 11.1.Suppose the exchange rate is $.30 per franc.Free-market forces would lead to a(n) ____ of the dollar against the franc and a(n) ____ in U.S.international competitiveness.

Question

Figure 11.1. Supply and Demand Schedules of Francs
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-Refer to Figure 11.1.Suppose the exchange rate is $.30 per franc.Free-market forces would lead to a(n) ____ of the dollar against the franc and a(n) ____ in U.S.international competitiveness.

Quizplus · Accepted Answer

If the exchange rate is $.30 per franc and free-market forces are at play, the dollar would depreciate against the franc, leading to an improvement in U.S. international competitiveness as U.S. goods become cheaper for foreign buyers.