ECON 162 Lecture Notes - Lecture 24: United States Treasury Security

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Chinese manipulation of the value of its currency. The demand for yen in the united states = the supply of dollars in japan. The supply of yen in the united states = the demand for dollars in japan. Demand for a country"s currency is a derived demand. Assume an increase in the us demand for japanese products. Therefore, american consumers have to demand more yen in the us. Therefore, the supply of dollars is increasing in japan. Quantity of yen increases, quantity of dollar increases. Value of the yen goes from: y1=$. 01 to y1=$. 02. Value of the dollar goes from: =y100 to =y50.

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