« previous next »

Author Question: How has China operated in the foreign exchange market, why, and with what effect? What will be an ... (Read 99 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?

The liver is the only organ that has the ability to regenerate itself after certain types of damage. As much as 25% of the liver can be removed, and it will still regenerate back to its original shape and size. However, the liver cannot regenerate after severe damage caused by alcohol.

Did you know?

There are more sensory neurons in the tongue than in any other part of the body.

Did you know?

Increased intake of vitamin D has been shown to reduce fractures up to 25% in older people.

Did you know?

Calcitonin is a naturally occurring hormone. In women who are at least 5 years beyond menopause, it slows bone loss and increases spinal bone density.

Did you know?

In inpatient settings, adverse drug events account for an estimated one in three of all hospital adverse events. They affect approximately 2 million hospital stays every year, and prolong hospital stays by between one and five days.

Regulation of heat exchange in the skin. Regulation of heat exchange in the skin.
The greenhouse effect. The greenhouse effect.
Gas exchange occurs at the alveolar capillary membrane. Gas exchange occurs at the alveolar capillary membrane.
Doppler effect Doppler effect
Soils support plant growth through ion exchange Soils support plant growth through ion exchange
The effect of selection on allele frequency The effect of selection on allele frequency
Video: Otitis Media

For a complete list of videos, visit our video library