The Balassa-Samuelson Forecast Applied to China During 2000-04

question 104

Multiple Choice

The Balassa-Samuelson forecast applied to China during 2000-04:

• A) failed to predict the slow rise in the exchange rate that actually occurred.
• B) failed to predict the Chinese inflation that actually occurred.
• C) failed to predict the rise in Chinese real GDP that actually occurred.
• D) predicted correctly that the slow appreciation of the Chinese exchange rate would result in higher inflation of the Chinese yuan.

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