Over the past decade, China has acquired hundreds of billions of U.S. dollars because of the trade

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Over the past decade, China has acquired hundreds of billions of U.S. dollars because of the trade imbalance between the two countries. They have used many of these dollars to purchase U.S. Treasury bonds. What would likely happen to the dollar’s value, and interest rates and inflation in the United States, if China decided to suddenly sell the Treasury bonds and exchange the dollars for other currencies?

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Finance Applications and Theory

ISBN: 978-0077861681

3rd edition

Authors: Marcia Cornett, Troy Adair

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