Suppose the Exchange Rate in the Year 2017 Was 5

question 25

Multiple Choice

Suppose the exchange rate in the year 2017 was 5 yuan per dollar and in 2018 the exchange rate fell to 4 yuan per dollar. If the price of a Chinese jumper was 120 yuan in both years, the new dollar price in 2018 would be ________ and imports of Chinese jumpers would ________.

• A) $40; decrease
• B) $40; stay the same because the price stayed the same at 120 yuan
• C) $30; increase
• D) $40; increase
• E) $30; decrease

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Definitions:

Demand Curves

Graphical representations showing the relationship between the price of a good and the quantity demanded by consumers.

Government Spending

Expenditure by the government on goods, services, and public projects to provide public services or stimulate the economy.

Income Quintile

A statistical measure dividing the population into five equal groups according to income levels.

Excise Tax

A charge imposed on certain products, services, or transactions, commonly integrated into the cost of the item.