If the United States is running a deficit trade balance with China, then in a free market we would expect the value of the Chinese yuan to depreciate against the U.S.dollar.

Question

Quizplus · Accepted Answer

A deficit trade balance means the U.S. is importing more from China than it is exporting to China, which typically leads to a stronger Chinese yuan relative to the U.S. dollar, as demand for yuan increases to pay for Chinese goods.

If the United States Is Running a Deficit Trade Balance