Many Analysts Believe That China's Currency (The Yuan) Is Undervalued

question 97

Multiple Choice

Many analysts believe that China's currency (the yuan) is undervalued in real terms. China has been experiencing a high rate of productivity growth. What would you expect to happen to Chinese GDP and Chinese prices relative to U.S. prices if this pattern continues over time?

• A) Chinese GDP will rise and Chinese prices will fall relative to U.S. prices.
• B) Chinese GDP will rise and Chinese prices will rise relative to U.S. prices.
• C) Chinese GDP will fall and Chinese prices will fall relative to U.S. prices.
• D) Chinese GDP will fall and Chinese prices will rise relative to U.S. prices.

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