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Probable effect of the exchange rate of country

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What is the probable effect of each of the following on the exchange rate of a country, other things being equal?

  • The country's inflation rate falls well below that of its trading partners.
  • Rising labor costs of the country's manufacturers lead to a worsening ability to compete in world markets.

Which would have a greater impact on exchange rate and why

Reference no: EM132813472

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