Suppose the exchange rate in the year 2010 was 4 yuan per dollar and in 2011 the exchange rate fell to 3 yuan per dollar.
If the price of a Chinese sweater was 120 yuan in both years, the new dollar price in 2011 would be ________ and imports of Chinese sweaters would ________.
A) 30; increase
B) 40; increase
C) 40; decrease
D) 30; decrease
E) 40; stay the same because the price stayed the same at 120 yuan
Question 2
A debtor nation is a country that
A) during its entire history has consistently run a capital account deficit.
B) borrows more from the rest of the world than it lends to it.
C) lends more to the rest of the world than it borrows from it.
D) during its entire history has invested more in the rest of the world than other countries have invested in it.
E) during its entire history has borrowed more from the rest of the world than it has lent to it.
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