1)The United States and the European Union have been pressing China’s government to alter its exchange rate policy to allow more flexibility, presumably so that the yuan will appreciate by a substantial amount. What has been and are China’s policies toward the foreign exchange market? From the point of view of China’s government and the well-being of the Chinese economy and people, what are the main reasons for the Chinese government to allow more flexibility and (probably) substantial yuan appreciation? What are the main reasons for China’s government to maintain its current exchange rate policy?
2) You have been asked to propose a specific revision of U.S. anti-dumping policy, to make it more likely to contribute to U.S. well-being. What will you propose?
3) A recession in the United States is likely to raise the growth of real GDP in Europe. Do you agree or disagree? Why?
4) What is the assignment rule? What are its possible advantages and drawbacks?
5) A Country has a floating exchange rate. Government spending now increases in an effort to reduce unemployment. What is the effect of this policy change on the exchange rate value of the country’s currency? Under what circumstances does the exchange rate reduce the expansionary effect of the fiscal change?
6) The time is 2011. The European monetary union and the euro have worked reasonably well. Britain has remained outside. Your British friend is trying to convince you that Britain should stay out of the monetary union. What are her two strongest arguments?
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