Question

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 the price level in China rises faster than the price level in the United States?

a. The U.S. dollar will appreciate.
b. The U.S. dollar will depreciate.
c. The U.S. dollar will not change in value.
d. NOT the value will not change

Answer 1

The U.S. dollar will appreciate. If the price lv in china rises too much ppl will think is expensive and thus buy products from the U.S. which in this case are cheaper, the demand for the dollar will increase and the U.S. dollar will appreciate. (not 100% sure btw)

Step-by-step explanation:

Answer 2

b)The U.S. dollar will depreciate.

Step-by-step explanation: