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Suppose that the United States and China trade exclusively with each other. What will happen to the value of the U.S. dollar, ceteris paribus ,
Suppose that the United States and China trade exclusively with each other. What will happen to the value of the U.S. dollar,ceteris paribus, if Chinese interest rates rise significantly?
a)The U.S. dollar will appreciate.
b)The U.S. dollar will depreciate.
c)The U.S. dollar will not change in value.
I think i'ts b since there will be more demand for the american dollar based on more demand for US goods.
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