All of the Following Statements Are True Except

question 82

Multiple Choice

All of the following statements are true except

• A)China's exchange rate policy increases exports in the long run.
• B)China's exchange rate policy is mainly an attempt to control inflation.
• C)China's exchange rate policy results in a yuan that has a lower foreign exchange rate against the U.S. dollar than it would otherwise have.
• D)China's exchange rate policy does not impact the real exchange rate in the long run.
• E)All of the above are true.

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Definitions:

Factor Endowments

The amount of land, labor, capital, and entrepreneurship that a country possesses and can exploit for manufacturing and service provision.

Technology

The technical means for producing goods and services.

Heckscher-Ohlin Model

An economic theory that proposes countries will export products that utilize their abundant and cheap factors of production and import goods that require resources that are rare or expensive domestically.

Endowment

An endowment is the total of a person's or entity's assets, minus liabilities, considered in the context of their financial impact or wealth.