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    concept of exchange rate

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    Numerous economists have suggested that the declining U.S. dollar could lead to increased inflationary pressures. Why would this be a problem? How does this suggestion relate to the concept of exchange rate pass through?

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    Solution Preview

    It's true that declining dollar leads to the inflationary pressure in the U.S. economy. Declining the currency means the value of U.S. product becomes cheaper to the world and at the same time the goods ...

    Solution Summary

    The concept of exchange rate is summarized.