Explain how an increase in the American demand for Chinese goods leads to a change in the Chinese yuan relative to the U.S. dollar
Americans who wish to buy more Chinese goods will need more Chinese yuan. This increase in demand for yuan increases the price of yuan (relative to the dollar) on the foreign exchange market. The yuan has, therefore, appreciated relative to the dollar, and the dollar has depreciated relative to the yuan. A yuan will buy more dollars than before, and a dollar will buy fewer yuan.
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When the Fed purchases government securities ________ loans end up being made because ________
A) more; excess reserves in the banking system increase B) fewer; excess reserves in the banking system decrease C) more; excess reserves in the banking system decrease D) fewer; required reserves in the banking system increase but desired reserves decrease E) fewer; excess reserves in the banking system increase
A product can be classified to be an inferior good if an increase in the income of buyers causes
a. A decrease in quantity demanded b. A decrease in demand c. An increase in demand d. An increase in quantity demanded.