Assume That at the Beginning of 2012,1 Dollar Could Be

question 21

Multiple Choice

Assume that at the beginning of 2012,1 dollar could be traded for 5 yuan.If in 2013,1 dollar was being traded for 6 yuan,it can be concluded that ________.

• A) the dollar depreciated against the yuan and the yuan appreciated against the dollar in 2013
• B) the dollar appreciated against the yuan and the yuan depreciated against the dollar in 2013
• C) the nominal exchange rate did not change in 2013
• D) the real exchange rate changed in 2013, assuming PPP holds

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Definitions:

Business Cycle

The natural rise and fall of economic growth over time, consisting of periods of expansion, peak, contraction, and trough.

Successive Peaks

Repeated achieving of higher levels or values in a given sequence, often used in the context of economic growth, stock market performance, or other measurements of success.

Contraction

A phase of the business cycle where there is a decline in national output and economic activity.

Standard Of Living

The degree of wealth and material comfort available to a person or community, measured through income, employment, class disparity, poverty rate, and housing affordability.