If U.S.labor productivity growth is 2 percent per annum and Swiss labor productivity growth is 6 percent per annum,the dollar will depreciate against the franc under a system of floating exchange rates.

Question

Quizplus · Accepted Answer

Under a system of floating exchange rates, currencies tend to depreciate if a country's productivity growth is lower than that of another country, as it can lead to a relative decrease in competitiveness and demand for the currency.

If USLabor Productivity Growth Is 2 Percent Per Annum and Swiss