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Figure: Yuan Foreign Exchange Market for U.S.Dollars
-(Figure: Yuan Foreign Exchange Market for U.S.Dollars)Based on this figure,if Americans begin to import more from China,which of the following is a possible outcome for the price of the dollar?

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Figure: Yuan Foreign Exchange Market for U.S.Dollars 
-(Figure: Yuan Foreign Exchange Market for U.S.Dollars)Based on this figure,if Americans begin to import more from China,which of the following is a possible outcome for the price of the dollar?

Quizplus · Accepted Answer

If Americans import more from China, the demand for yuan increases as they need more yuan to pay for Chinese goods. This increased demand for yuan leads to a depreciation of the dollar relative to the yuan, resulting in fewer yuan per dollar, such as seven yuan per dollar.

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