Chapter 29

Growing U.S. Openness

Openness of Different
Economies, 1997

Exchange-Rate Determination

A Decrease in Demand for Dollars Leads to Dollar Depreciation

Monetary Tightening Increases Demand for Dollars and Produces Dollar Appreciation

PPP Calculations Change the Relative Size of Nations, 1998

Hume’s Four-Pronged International Adjustment Mechanism

Governments Intervene to Defend Fixed Exchange Rate