"As the Credit Crisis Unfolded Over the Past Year, One

question 42

Multiple Choice

"As the credit crisis unfolded over the past year, one of the few certainties in the global economy seemed to be China's 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 months".
Beijing's Burden, www.FT.com, by Geoff Dyer, Sept. 23, 2008
-According to the article, ________ are expected to contribute ________ to China's real GDP in 2008.

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

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Definitions:

Net Capital Outflows

The difference between a nation's outflow of capital to foreign countries and its incoming capital from abroad, showing how much a country's residents are investing in foreign assets compared to how much foreigners are investing in the domestic country.

Deficit Change

The amount by which a government, company, or individual's spending exceeds income over a particular period of time.

Exchange Rate

The price of one country's currency expressed in terms of another country's currency.

Net Exports

The difference between a country's total value of exports and its total value of imports. Positive net exports mean a country exports more than it imports, while negative net exports indicate the opposite.