Question

Suppose the new CEO for Apple Inc. decides to produce all the company’s products in the...

Suppose the new CEO for Apple Inc. decides to produce all the company’s products in the U.S. instead of China. As a result

a. This will cause the demand and supply curve shift how?

b. The value of the U.S. dollar will

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Answer #1

a.

Since the new CEO for Apple Inc. decides to produce all the company’s products in the U.S. instead of China. As a result the demand for the US currency will increases because when all production is taking place in US, then the remuneration to the factors of production will be paid in US dollar.

Hence demand for US dollar increases, therefore demand curve of the US dollar shifts rightward. This leads to appreciation of US dollar and depreciation of China currency.

b.

The value of US dollar will appreciate.

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