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    Pegged Dollar

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    The Hong Kong dollar's value is tied to the U.S. dollar. Explain how the following trade patterns would be affected by the appreciation of the Japanese yen against the dollar: (a) Hong Kong exports to Japan and (b) Hong Kong exports to the United States?

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    Answer (a):
    As the Japanese yen appreciates against the US dollar, the Japanese Yen will also appreciate against the Hong Kong dollar. This will ...

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