How Were Countries Whose Industries Competed with Chinese Industry Affected

question 131

Multiple Choice

How were countries whose industries competed with Chinese industry affected by a yuan that was pegged to the dollar?

• A)Because the yuan was undervalued at the pegged exchange rate,the level of Chinese exports remained higher than they would have been if the exchange rate was allowed to float freely.
• B)Because the yuan was overvalued at the pegged exchange rate,competing firms from other countries feared that abandoning the peg would lead to an increase in Chinese exports.
• C)Competitors feared that the declining value of the dollar would continue to make Chinese goods more expensive.
• D)Because China's population is so large relative to other countries,the pegged exchange rate made the goods of foreign competing firms much less expensive than domestic Chinese goods.

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Definitions:

Materials

The physical components used in the production of goods, including both raw inputs and manufactured parts.

Processing Department

A section of a manufacturing facility where a specific type of processing or assembly operation is performed on products.

Ending Inventory

Ending Inventory refers to the total value of goods available for sale at the end of an accounting period, calculated by adding purchases to beginning inventory and subtracting the cost of goods sold.

Conversion Costs

The sum of labor and overhead costs incurred to convert raw materials into finished goods.