INTERNATIONAL ECONOMICS, 7TH EDITION
Study Resources: Questions for Study & Review
Chapter 23
1. If China maintains its large trade surplus, but allows its exchange rate to be market
determined, what do you think will be the impact on the U.S.$/Yuan exchange rate?
What would be the impact on U.S. interest rates?
2. In what ways is the Asian debt crisis similar to, and different from, the difficulties which
3. If one developing country experiences a payments and debt crisis, explain through
which linkages the crisis might spread to other countries in the region?
INTERNATIONAL ECONOMICS, 7TH EDITION
Study Resources: Questions for Study & Review
Chapter 23: Answers
1.
With a trade surplus and flexible exchange rates, the Chinese exchange rate would
3.
Interest parity highlights that expectations play an important role in exchange rate