Why Did China Buy $450 Billion in Foreign Exchange Reserves

question 34

Multiple Choice

Why did China buy $450 billion in foreign exchange reserves in 2010?

• A)to encourage free trade between all nations
• B)to keep the yuan from depreciating
• C)to keep the yuan from appreciating
• D)to slow down the growth of the Chinese economy

---

Definitions:

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to products, calculated before the period begins based on expected costs and activity levels.

Indirect Labour

Labor costs associated with workers not directly involved in the production of goods or services.

Direct Labour Costs

The wages and benefits paid to employees who are directly involved in the production of goods or services.

Overhead Costs

Indirect costs of operating a business that cannot be directly attributed to a specific product or service, such as rent, utilities, and administrative expenses.