IT is a generally recognized principle, but not an
entirely unchallenged one, that exports will be
stimulated and imports retarded if a country's
monetary unit depreciates under me pressure of in-
flationary forces so that along with rising commodity
prices at home there is an even more rapid rise in the
country's foreign-exchange rates.¹ These rates may
be properly looked upon as one variety of price. They
are the highly sensitive prices at home of foreign
monetary units abroad, as, for example, the number
of dollars in New York required to buy a pound in
London or the number of cents in New York re-
quired to buy a peso in Buenos Aires.

The principle may be illustrated by a hypothetical
case based on American happenings at the time we
went off the gold standard, early in 1933, when
within less than a year the gold value of our dollar

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