When the Chinese central bank decides to allow its currency to float freely, the renminbi will (Click to select) depreciate appreciate and the dollar will (Click to select) depreciate appreciate .

Suppose that the Chinese central bank has been intervening in the foreign exchange market, buying U.S. dollars in the market in an effort to keep its own currency, the renminbi (measured in yuan), weak. Use the model of demand and supply for dollars to show what the immediate effect would be on the yuan/dollar exchange rate of a decision by China to allow its currency to float freely. Instructions: On the graph below, click and drag the supply and/or demand curve to answer this question. When you are done, use the information in the graph to answer the question below. So Foreign Currency per dollar x DO Change Quantity of dollars traded