Quick%20Quiz%2012%21 - Quick Quiz 12! 1. 2. Over the coming...

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© Hadi Salehi Esfahani Over the coming decade, productivity is likely to grow much faster in China's tradable sector than in its non-tradable sector. In the U.S., the difference in the productivity growth rates of the two sectors is likely to be much smaller. 1. What do these observations imply for the future trend in the real exchange rate of China's currency, yuan , vis-à-vis the US dollar? Do you expect the yuan to appreciate or depreciate in real terms against the dollar as a result of these productivity trends? 2. The average price level in the US is expected to remain practically constant and the Chinese Central Bank is keeping the nominal yuan-dollar exchange rate constant. What do you expect to happen to the price level in China over the next decades given the trends in productivity? Quick Quiz 12!
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© Hadi Salehi Esfahani 1. What do these observations imply for the future trend in the real exchange rate of China's currency, yuan , vis-à-vis the US dollar?
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This note was uploaded on 01/27/2012 for the course ECON 509 taught by Professor Villamil during the Fall '08 term at University of Illinois, Urbana Champaign.

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Quick%20Quiz%2012%21 - Quick Quiz 12! 1. 2. Over the coming...

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