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viva [34]
3 years ago
7

Suppose that the United States and China trade exclusively with each other. What will happen to the value of the U.S. dollar, ce

teris paribus, if the price level in China rises faster than the price level in the United States
Business
1 answer:
grin007 [14]3 years ago
6 0

Answer:

If the price level in China is rising faster than the price level in the US, this means that the Chinese inflation rate is higher.

two different things will happen here:

1) higher inflation means that Chinese products will be more expensive which will increase the demand for American products. An increase in the demand for American products will appreciate the US dollar, but...

2) Inflation all by itself generally would not alter the exchange rate, but high inflation generally leads to high interest rates. Central banks usually increase interest rates to decrease inflation.

Higher interest rates will usually increase the demand of a currency which result in an appreciation of the local currency against foreign currencies. In this case, the Chinese yuan should appreciate against the US dollar.

Generally the appreciation of a currency due to high interest rates will offset the depreciation due to a negative trade balance.

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Answer:

b. It creates equality throughout society

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The correct answer to this open question is the following.

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That is what would have been the factor that supports the forecast. Although inflation has been constant at low levels, what changed was the Producer Price Index that is moving up. This factor could modify the results despite inflation is stable at this moment. When inflation is high, it directly affects the price of goods and the consumer.

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3 years ago
Which of the following economic concepts BEST explains why grape tomatoes cost more than the other tomatoes in this produce depa
melisa1 [442]

A tomatoes cost more than the other tomatoes in this produce department because the cost of production is higher.

<h3>Why will product cost more?</h3>

A product can cost more when the demand for the product is high thus increasing the price of the product.

A product can cost more if the cost of production is higher than any other products.

Therefore, tomatoes cost more than the other tomatoes in this produce department because the cost of production is higher.

Learn more on demand here,

brainly.com/question/1288364

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6 0
3 years ago
Luke is starting to look for a job. In which two ways would letters of recommendation be beneficial for his job hunt?
Rufina [12.5K]
Hello!

The correct answers are options A and B. 

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I hope this helps answer your question! Have a great day!
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