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04-19-2008, 05:18 AM
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| Economics question please help? If inflation rates go up, would that mean the exchanges rates will suffered depreciation, whereby (for example) If inflation causes China's exports to be inreased in price, then the US dollar would be be exhange for less yuan?      |
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04-19-2008, 05:18 AM
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| There's never really anyway of predicting whats going to happen (due to many different factors at play), but basically what should happen is this - the price of China's goods have gone up, therefore demand for them will fall. As a result the demand for the yuan goes down i.e. the yuan will depreciate against the dollar (and every other currency) so in fact you would get more yuan for your dollar (the dollar has become realtively more valuable). |
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