If one country imposes import restrictions on another country, how will the interest rates and exchange rates of the two countries change? Why?
Imposing import restrictions means that the country's international trade situation will change to a trade surplus, that is, selling more and buying less. In this way, the country's foreign exchange will naturally increase gradually, because it spends less and earns more. With the increase of foreign exchange, from the perspective of supply and demand, due to a large amount of foreign exchange flowing into China, it will naturally become oversupply, so foreign exchange will gradually become worthless, and then the exchange rate of local currency against foreign currency will naturally increase.