Reference: Ref 20-4 (Figure: Yuan Foreign Exchange Market for 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?

Question

Quizplus · Accepted Answer

According to the figure, an increase in imports from China would lead to an increase in demand for yuan in the foreign exchange market, which would cause the price of the dollar to depreciate (i.e. fewer yuan per dollar). Therefore, the possible outcome for the price of the dollar is 7 yuan per dollar, option D.