ʺAs the Credit Crisis Unfolded Over the Past Year, One

question 145

Multiple Choice

ʺAs the credit crisis unfolded over the past year, one of the few certainties in the global economy seemed to be Chinaʹs ability to plough on regardless of double-digit growth rates...The ...crisis has also focused ...on the need to update a growth model that...is still dependent on assembling goods for export without adding much value and on heavy industries that create pollution. Chinese companies have continued to find new foreign markets for their products...several other factors point to a slowing property market...production of steel, cement and air conditioners was down... Retail sales have risen by 23 per cent in each of the last two monthsʺ.
Beijingʹs Burden,
-According to the article_________, are expected to contribute _________to Chinaʹs real GDP in 2008.

• A) exports and investment; negatively
• B) consumption and government spending; negatively
• C) rental income and investment; negatively
• D) exports and consumption; positively

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Definitions:

Economic Recession

A significant decline in economic activity spread across the economy, lasting more than a few months, typically visible in GDP, real income, employment, industrial production, and wholesale-retail sales.

Keynesian View

An economic theory proposing that government intervention, through monetary and fiscal policy, can mitigate the adverse effects of recessions and depressions.

Balanced Budget

A financial statement demonstrating that revenues and expenditures are equal, leading to no deficit for the period.

Fiscal Policy

Government strategies for adjusting its spending levels and tax rates to influence a nation's economy.