How do supply and demand dynamics interact with currency exchange rates to influence real wages in an export-driven economy?

In an export-driven economy, the demand for goods from that country can affect currency exchange rates, which in turn influences real wages. When foreign buyers want to purchase more products, the demand for the country's currency increases because they need it to pay for those goods. This higher demand can lead to a stronger currency, making imports cheaper and exports more expensive for foreign buyers. As exports become pricier, companies may earn more money, which can lead to increased profits and potentially higher wages for workers. For example, if a country exports a lot of cars and foreign demand rises, the car manufacturers may pay their workers higher wages because they are making more money, thus improving real wages in that economy.