tag:blogger.com,1999:blog-1735628051336217048.post8931619071495389592..comments2024-02-24T04:08:30.728-05:00Comments on MV=PQ: A Resource for Economic Educators: A Problem of Exchange RatesTim Schillinghttp://www.blogger.com/profile/09159198592921510105noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-1735628051336217048.post-32256825051910755332008-02-06T17:07:00.000-05:002008-02-06T17:07:00.000-05:00Oil is one of the commodities that is generally pr...Oil is one of the commodities that is generally priced in dollars regardless of the buyer.<BR/><BR/>This is a practical matter, but is also a reason many of those countries link their currency to the dollar.<BR/><BR/>But overall, it has less to do with oil payments and more to do with the fact that as the U.S. dollar loses value in forex markets, linked currencies lose just as much. <BR/><BR/>This means that oil producing countries, who have to import much of what they consume, end up paying higher prices for a wide variety of products, contributing to overall inflation.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1735628051336217048.post-45328067373493142612008-02-06T15:58:00.000-05:002008-02-06T15:58:00.000-05:00I understand that the US only imports 10% of our o...I understand that the US only imports 10% of our oil from the Middle East. How does this impact inflation in these countries? If the US increased its Middle East imports would inflation increase in the Middle East or do all the Middle East Countries already receive payment in US dollars regardless of who is buying the oil?Anonymousnoreply@blogger.com