Answer to Question #150307 in Macroeconomics for Kane

Question

An increase in China’s demand for American goods would cause the value of the dollar to
Appreciate because of inflation
Appreciate because China would be buying more dollars
Depreciate because the U.S. would be selling more dollars to China
Depreciate because of an increase in the U.S.’s supply of money in the forex market

Answer 1

Appreciate because of inflation.