« previous next »

Author Question: How has China operated in the foreign exchange market, why, and with what effect? What will be an ... (Read 44 times)

iveyjurea

  • Hero Member
  • *****
  • Posts: 555
on: Jun 29, 2018
How has China operated in the foreign exchange market, why, and with what effect?
 
  What will be an ideal response?

Question 2

Which of the following correctly comments on the following statement? The only way to increase the revenue from selling a product is to increase the product's price.
 
  A) This statement is not true. Revenue will increase as the price of the product increases only if demand is inelastic.
  B) It is not true. Revenue will increase as the price of the product increases only if demand is elastic.
  C) This statement is not true. Revenue will decrease as the price of the product increases because quantity demanded will fall.
  D) The statement is true.
InMicro ¦ Hubbard, O'Brien ¦ 1st Edition
Buy Test-Bank


mcomstock09

  • Sr. Member
  • ****
  • Posts: 377
Reply #1 on: Jun 29, 2018
Answer to Question 1

From 1997 until 2005, the People's Bank of China fixed the Chinese yuan exchange rate. Over this time, the demand for the yuan increased, so the People's Bank of China supplied additional yuan to keep the exchange rate constant. By supplying yuan, the People's Bank acquired large amounts of foreign currency. In addition, by fixing its exchange rate China essentially pegged its inflation rate to equal the U.S. inflation rate. Since 2005 the yuan has been allowed to appreciate slightly as the People's Bank moved to a crawling peg exchange rate policy. The exchange rate has not been allowed to change much, so over the long run the Chinese inflation rate remains closely tied to U.S. inflation.

Answer to Question 2

A


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

Long-term mental and physical effects from substance abuse include: paranoia, psychosis, immune deficiencies, and organ damage.

Did you know?

The first war in which wide-scale use of anesthetics occurred was the Civil War, and 80% of all wounds were in the extremities.

Did you know?

Glaucoma is a leading cause of blindness. As of yet, there is no cure. Everyone is at risk, and there may be no warning signs. It is six to eight times more common in African Americans than in whites. The best and most effective way to detect glaucoma is to receive a dilated eye examination.

Did you know?

Medications that are definitely not safe to take when breastfeeding include radioactive drugs, antimetabolites, some cancer (chemotherapy) agents, bromocriptine, ergotamine, methotrexate, and cyclosporine.

Did you know?

All adverse reactions are commonly charted in red ink in the patient's record and usually are noted on the front of the chart. Failure to follow correct documentation procedures may result in malpractice lawsuits.

Grace Service, a YMCA missionary, explained that these porters worked at the base of Mount Omei in S Grace Service, a YMCA missionary, explained that these porters worked at the base of Mount Omei in S
Effect of Productivity Improvement in the Malthusian Model Effect of Productivity Improvement in the Malthusian Model
Effect of Increasing the Investment Rate on the Steady State Effect of Increasing the Investment Rate on the Steady State
Countercurrent Exchange Countercurrent Exchange
Markets and Institutions Market Story Problem Markets and Institutions Market Story Problem
Age structure for three countries (China) Age structure for three countries (China)
Video: Body plan of euglena Animation

For a complete list of videos, visit our video library