1. If the Chinese yuan has a floating exchange rate with the US dollar, a) US multinationals have no economic exposure b) Chinese exporting firms do not face currency risk c) Curren

1. If the Chinese yuan has a floating exchange rate with the US dollar, a) US multinationals have no economic exposure b) Chinese exporting firms do not face currency risk c) Curren

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1.         If the Chinese yuan has a floating exchange rate with the US dollar,

a)     US multinationals have no economic exposure

b)    Chinese exporting firms do not face currency risk

c)     Currency risk can lead to economic exposure

2.If real exchange rates are measured as domestic inflation divided by foreign inflation proofed for nominal exchange rates, a real exchange rate greater than one indicates

a)   competitiveness of domestic multinationals has improved

b)    relative purchasing power of domestic consumers has improved

c)     relative purchasing power of foreign consumers has improved

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