Which is false? The Chinese government is reluctant to let the yuan appreciate a

Question

Which is false?   The Chinese government is reluctant to let the yuan appreciate against the US dollar because:

Appreciation of the yuan would increase the price of a real estate for young Chinese families

Appreciation of the yuan would increase the price Chinese exports

Appreciation of the yuan would reduce Chinese reserve holdings in the US dollars

Appreciation of the yuan would increase imports and reduce the CA surplus

Under the floating exchange rates the CA deficit can be adjusted because

The deficit causes currency appreciation and the rise of exports

The deficit causes currency depreciation and the rise of exports

Adjustment can only happen under fixed exchange rates system

Adjustment is possible if the government fixes the exchange rate immediately

Question 45

Which is false about the IMF?

The IMF is the "lender of last resort"

IMF lending to member state can exceed the quota of the participation fee

The IMF is a democratic institution with one country - one vote system

The IMF austerity measures implemented during the 1997-1998 Asian crisis were mostly misplaced and deepend the crises

Which is true?

Argentina had a system called currency board

Russian Ruble was very strong because it was backed up by a gold reserve in the 1990's

When a country raises taxes and decreases budget deficit Current account deficit is rising

When a country adopts a fixed exchange rate system it does not need much currency reserves

2 points   

Question 47

Which is false about the Hecksher-Ohlin theorem?

The countries with lots of capital should make capital intensive goods

The owners of capital in labor abundant countries will lose

the owners of labor (workers) in labor abundant countries will see their wages rise

The workers in developed countries will get their manufacturing jobs back only when their wages will lower than in poor developing countries

2 points   

Question 48

The "time bomb" in Thailand was that the country had high nominal inflation and a fixed exchange rate

True

False

  

Question 49

According to the J-Curve effect this is true. The current account will deacrease after the devaluation and then increase when

Price elasticity of export plus the price elasticity of import will be greater than 1

Price elasticity of export plus the price elasticity of import will be lower than 1

Price elasticity of export plus the price elasticity of import will be equal to  1

2 points   

Question 50

When VW decides soon to build a factory to make a new SUV in the USA it will have the follwing impact on the German BOP (select a correct answer)

unilateral transfer will increase

interest income will increase

capital account will decrease

the financial account will decrease

Appreciation of the yuan would increase the price of a real estate for young Chinese families

Appreciation of the yuan would increase the price Chinese exports

Appreciation of the yuan would reduce Chinese reserve holdings in the US dollars

Appreciation of the yuan would increase imports and reduce the CA surplus

Explanation / Answer

Which is false?   The Chinese government is reluctant to let the yuan appreciate against the US dollar because:

Appreciation of the yuan would increase the price of a real estate for young Chinese families

Appreciation of the yuan would increase the price Chinese exports

Appreciation of the yuan would reduce Chinese reserve holdings in the US dollars

Appreciation of the yuan would increase imports and reduce the CA surplus

Under the floating exchange rates the CA deficit can be adjusted because

The deficit causes currency appreciation and the rise of exports

The deficit causes currency depreciation and the rise of exports

Adjustment can only happen under fixed exchange rates system

Adjustment is possible if the government fixes the exchange rate immediately

Question 45

Which is false about the IMF?

The IMF is the "lender of last resort"

IMF lending to member state can exceed the quota of the participation fee

The IMF is a democratic institution with one country - one vote system

The IMF austerity measures implemented during the 1997-1998 Asian crisis were mostly misplaced and deepend the crises

Which is true?

Argentina had a system called currency board

Russian Ruble was very strong because it was backed up by a gold reserve in the 1990's

When a country raises taxes and decreases budget deficit Current account deficit is rising

When a country adopts a fixed exchange rate system it does not need much currency reserves

2 points   

Question 47

Which is false about the Hecksher-Ohlin theorem?

The countries with lots of capital should make capital intensive goods

The owners of capital in labor abundant countries will lose

the owners of labor (workers) in labor abundant countries will see their wages rise

The workers in developed countries will get their manufacturing jobs back only when their wages will lower than in poor developing countries

2 points   

Question 48

The "time bomb" in Thailand was that the country had high nominal inflation and a fixed exchange rate

True

False

  

Question 49

According to the J-Curve effect this is true. The current account will deacrease after the devaluation and then increase when

Price elasticity of export plus the price elasticity of import will be greater than 1

Price elasticity of export plus the price elasticity of import will be lower than 1

Price elasticity of export plus the price elasticity of import will be equal to  1

2 points   

Question 50

When VW decides soon to build a factory to make a new SUV in the USA it will have the follwing impact on the German BOP (select a correct answer)

unilateral transfer will increase

interest income will increase

capital account will decrease

the financial account will decrease

Appreciation of the yuan would increase the price of a real estate for young Chinese families

Appreciation of the yuan would increase the price Chinese exports

Appreciation of the yuan would reduce Chinese reserve holdings in the US dollars

Appreciation of the yuan would increase imports and reduce the CA surplus

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