Course Introduction
Business Economics
Pre-Test Questions
Business Economics explores the application of economic theories and principles to real-world business decision-making. The course covers essential concepts such as supply and demand, market structures, pricing strategies, production and cost analysis, and the economic environment in which firms operate. Students will analyze how businesses respond to changes in government policy, competition, and global markets. Through case studies and practical examples, the course emphasizes how economic reasoning supports effective strategies in resource allocation, profit maximization, and risk management within organizations.
Recommended Textbook
Economics 5th Edition by R. Glenn Hubbard
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Page 2
Chapter 1: Economics: Foundations and Models
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Sample Questions
Q1) At a recent faculty meeting, Lorraine Waverly, president of Skywalker College, announced that enrollment is up by 12 percent over the previous semester. If enrollment the previous semester was 3,250 students, what is the student enrollment this semester?
A) 390
B) 2,860
C) 3,640
D) 4,030
Answer: C
Q2) The idea that because of scarcity, producing more of one good or service means producing less of another good or service refers to the economic concept of A) optimization. B) efficiency.
C) trade-off.
D) equity.
Answer: C
Q3) Refer to Table 1-7. The table above shows the sales of DVD recorders in North America. Present the information using a bar graph.
Answer: 11ea892a_4dc5_2a49_8f98_83b461c56091_TB4188_00
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Chapter 2: Trade-Offs, Comparative Advantage, and the Market System
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Sample Questions
Q1) Refer to Table 2-4. Assume Dina's Diner only produces sliders and hot wings. A combination of 40 sliders and 50 hot wings would appear
A) along Dina's production possibilities frontier.
B) inside Dina's production possibilities frontier.
C) outside Dina's production possibilities frontier.
D) at the vertical intercept of Dina's production possibilities frontier.
Answer: A
Q2) Refer to Figure 2-4. Consider the following events: a. a reduction in the patent protection period to no more than 2 years
B. a war that destroys a substantial portion of a nation's capital stock
C. the lack of secure and enforceable property rights system
Which of the events listed above could cause a movement from W to V?
A) a only
B) a and b only
C) a and c only
D) b and c only
E) a, b, and c
Answer: C
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Chapter 3: Where Prices Come From: the Interaction of
Demand and Supply
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Sample Questions
Q1) Refer to Figure 3-2. A technological advancement would be represented by a movement from
A) A to B.
B) B to A.
C) S1 to S2.
D) S2 to S1.
Answer: C
Q2) A decrease in the demand for eggs due to changes in consumer tastes, accompanied by a decrease in the supply of eggs as a result of an outbreak of Avian flu, will result in
A) a decrease in the equilibrium quantity of eggs and no change in the equilibrium price. B) a decrease in the equilibrium price of eggs and no change in the equilibrium quantity. C) a decrease in the equilibrium price of eggs; the equilibrium quantity may increase or decrease.
D) a decrease in the equilibrium quantity of eggs; the equilibrium price may increase or decrease.
Answer: D
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5
Chapter 4: Economic Efficiency, Government Price Setting, and Taxes
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Sample Questions
Q1) Refer to Table 4-8. If a minimum wage of $10.00 an hour is mandated, what is the quantity of labor supplied?
A) 390,000
B) 370,000
C) 350,000
D) 40,000
Q2) Refer to Table 4-7. What is the equilibrium hourly wage (W*) and the equilibrium quantity of labor (Q*)?
A) W* = $10.50; Q* = 590,000
B) W* = $11.50; Q* = 570,000
C) W* = $9.50; Q* = 570,000
D) W* = $10.50; Q* = 1,200,000
Q3) A demand curve shows
A) the willingness of consumers to buy a product at different prices.
B) the willingness of consumers to substitute one product for another product.
C) the relationship between the price of a product and the demand for the product.
D) the relationship between the price of a product and the total benefit consumers receive from the product.
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Chapter 5: Externalities, Environmental Policy, and Public Goods
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Q1) Refer to Figure 5-7. What is the incremental benefit of increasing the quantity of pollution reduction from QB to QE units?
A) PF
B) PF × QE
C) the value of the area BEF
D) the value of the area QBBFQE
Q2) An important difference between the demand for a private good and the demand for a public good is that
A) individuals reveal their preferences for a public good but they do not have to reveal their preferences a private good.
B) the resources used to provide public goods are common resources or government owned; the resources used to produce private goods are all privately owned.
C) individuals reveal their preferences for a private good but they do not have to reveal their preferences for a public good.
D) the demand for a private good produces consumption externalities; the demand for a public good produces production externalities.
Q3) How does a negative externality in production reduce economic efficiency?
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Chapter 6: Elasticity: the Responsiveness of Demand and Supply
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Q1) Which of the following explains why a firm would be interested in the knowing the price elasticity of demand for a good it sells?
A) The price elasticity of demand can be used to determine the impact of changes in income on quantity sold.
B) Knowing the price elasticity of demand allows the firm to determine how the cost of producing additional units of the good will change.
C) Knowing the price elasticity of demand allows the firm to calculate how changes in the price of the good will affect the firm's total profit.
D) The price elasticity of demand allows the firm to calculate how changes in the price of the good will affect the firm's total revenue.
Q2) The price elasticity of demand for canned soup is estimated at -1.62. What happens to sales revenue if the price of canned soup rises?
A) It falls by 162 percent.
B) It rises by 1.62 percent.
C) It falls.
D) It rises.
Q3) Explain the relationship between price elasticity of demand and total revenue.
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Page 8
Chapter 7: The Economics of Health Care
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Sample Questions
Q1) Due to adverse selection, very few lemons will be sold in the market for used cars.
A)True
B)False
Q2) A doctor pursuing his own interests rather than the interests of his patients is an example of the principal-agent problem.
A)True
B)False
Q3) College education tends to result in a positive externality because the recipient receives the full benefit of the education.
A)True
B)False
Q4) The Congressional Budget Office estimates that the additional taxes and fees enacted under the ACA will be enough to pay for the plan and reduce the federal government's budget deficit.
A)True
B)False
Q5) How do adverse selection and moral hazard affect the market for insurance?
Q6) What is moral hazard?
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Chapter 8: Firms, the Stock Market, and Corporate Governance
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Sample Questions
Q1) Traditionally, Wall Street investment banks had been organized as partnerships, but by 2000 they had converted to being publicly traded companies. As partnerships, the principal-agent problem is ________ because there is ________ separation of ownership from control.
A) reduced; much
B) reduced; little
C) increased; much
D) increased; little
Q2) One result of the financial meltdown of the late 2000s was that mortgage institutions ________ and ________ were brought under direct control of the government.
A) Fannie Mae; Freddie Mac
B) Glass Steagall; Sarbanes Oxley
C) Goldman Sachs; Morgan Stanley
D) Lehman Brothers; FDIC
Q3) Who is the seller in a primary market and who is the seller in a secondary market?
Q4) How is economic profit found?
Q5) In a corporation, what are "inside directors" and "outside directors"?
Page 10
Q6) What type of business has the potential for double taxation of profits and why?
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Chapter 9: Comparative Advantage and the Gains From International Trade
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Q1) Selling a product at a price below its cost is known as dumping.
A)True
B)False
Q2) Trade between countries that is without restrictions is called
A) unobstructed commerce.
B) unabated trade.
C) free trade.
D) unencumbered trade.
Q3) Protection in the form of tariffs create winners and losers. Winners include ________ and losers include ________.
A) U.S. consumers and taxpayers; foreign firms that rely on U.S. exports
B) firms sheltered from foreign competition; U.S. consumers and taxpayers
C) U.S. firms that rely on exports to foreign countries; foreign manufacturers
D) the U.S. government; firms sheltered from foreign competition
Q4) A situation in which a country does not trade with other countries is called
A) autarky.
B) self-actualization.
C) autonomy.
D) independence.
Q5) What are terms of trade?
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Chapter 10: Consumer Choice and Behavioral Economics
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Sample Questions
Q1) Refer to Figure 10-8. Given the budget constraint in the diagram, which of the following statements is false?
A) The consumer receives the same level of utility from consumption bundles d, e and f.
B) Consumption bundles b and c yield the same level of utility, which is higher than the utility represented by bundle a.
C) Although the consumer receives the same level of utility from bundles d and e, she cannot afford to purchase bundle d.
D) The consumer's optimal bundle could be bundle d, e or f.
Q2) A consumer's utility-maximizing combination of goods is given by the bundle that corresponds to the point on
A) the indifference curve that intersects the horizontal axis.
B) the indifference curve that intersects the vertical axis.
C) an indifference curve that is tangent to the budget constraint.
D) the budget constraint where it intersects one of the axes.
Q3) The demand curve for an inferior good can never be downward sloping.
A)True
B)False
Q4) What is marginal utility and what is the law of diminishing marginal utility?
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Chapter 11: Technology, Production, and Costs
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Sample Questions
Q1) The relationship between the inputs employed by a firm and the maximum output that it can produce with those inputs is the firm's
A) production function.
B) supply curve, or supply schedule.
C) marginal product of labor.
D) average product of labor.
Q2) The law of diminishing marginal returns
A) explains why the average total cost and marginal cost curves are U-shaped in the short run.
B) explains why the average total cost, average fixed cost and the marginal cost curves are U-shaped in the short run.
C) causes average total costs to rise at a decreasing rate as output increases.
D) causes the difference between average total cost and average variable cost to get smaller as output increases.
Q3) Which of the following statements is false?
A) An explicit cost is a nonmonetary opportunity cost.
B) In the short run: total cost = fixed cost + variable cost.
C) Variable costs are costs that change as output changes.
D) In the long run there are no fixed costs.
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Page 13
Chapter 12: Firms in Perfectly Competitive Markets
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Sample Questions
Q1) A perfectly competitive industry achieves allocative efficiency in the long run. What does allocative efficiency mean?
A) Each firm produces up to the point where the price of the good equals the marginal cost of producing the last unit.
B) Each firm produces up to the point where all scale economies are exhausted.
C) Production occurs at the lowest average total cost.
D) Firms use an input combination that minimizes cost and maximizes output.
Q2) All of the following can be used to compute average profit except
A) marginal profit minus marginal cost.
B) total profit divided by quantity.
C) average revenue minus average total cost.
D) price minus average total cost.
Q3) Why are individual buyers and sellers in perfect competition called price takers?
Q4) Refer to Figure 12-7. If the market price is P3, the firm
A) will break even.
B) will make a profit.
C) will earn enough revenue to cover its variable costs but not its fixed costs.
D) will produce a quantity of Q1.
Q5) Under what conditions should a competitive firm shut down in the short run?
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Chapter 13: Monopolistic Competition: the Competitive
Model in a More Realistic Setting
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Sample Questions
Q1) Refer to the Article Summary. By marketing to the LGBT community, Fort Lauderdale and the CVB are trying to set the city apart from competing travel destinations. This is an example of
A) defending a brand name.
B) blocking entry into the market.
C) legally enforcing a trademark.
D) product differentiation.
Q2) When new firms are encouraged to enter a monopolistically competitive market, A) some existing firms must be earning economic profits.
B) they do so because there is insufficient product differentiation.
C) the demand curve facing an existing firm shifts to the right.
D) the marginal cost curve facing an existing firm shifts downwards.
Q3) Refer to Table 13-2. What is the marginal profit from producing and selling the 5th case?
A) $275
B) $145
C) $35
D) $20
Q4) How would a marketing campaign directed at single women improve the chances of success at a place like a cigar bar?
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Chapter 14: Oligopoly: Firms in Less Competitive Markets
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Q1) Consider two single-malt whiskey distillers, Laphroaig and Knockando. If they advertise, they can both sell more whiskey and increase their revenue. However, the cost of advertising more than offsets the increased revenue so that each distiller ends up with a lower profit than if they do not advertise. On the other hand, if only one advertises, that distiller increases its market share and also its profit.
a. Construct a payoff matrix using the following hypothetical information: If neither distiller advertises: each earns a profit of $35 million per year. If both advertise: each earns a profit of $20 million per year. If one advertises and the other does not: the distiller who advertises earns a profit of $50 million and the distiller who does not advertise earns a profit of $9 million.
b. If the two distillers agree to coordinate their strategies, what is the outcome?
Q2) On November 7, 1996, the Distilled Spirits Council of the United States decided to end its voluntary ban on television and radio liquor advertisement. The ban on hard liquor advertising had been in effect since 1936 for radio and 1948 for television. Did the lifting of this ban likely increase or decrease the profits of hard liquor companies? Briefly explain.
Q3) What is the difference between explicit collusion and implicit collusion?
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Chapter 15: Monopoly and Antitrust Policy
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Q1) Refer to Figure 15-15. What is the economically efficient output level and what is the price at that level?
A) Q4, P1
B) Q3, P2
C) Q2, P2
D) Q2, P3
Q2) Refer to Figure 15-1. Which of the following statements about the firm depicted in the diagram is true?
A) The fact that this firm is a natural monopoly is shown by the continually declining long-run average total cost as output rises.
B) The fact that this firm is a natural monopoly is shown by the continually declining market demand curve as output rises.
C) The fact that this firm is a natural monopoly is shown by the continually declining marginal revenue curve as output rises.
D) The fact that this firm is a natural monopoly is shown by the fact that marginal cost lies below the long-run average total cost where the firm maximizes its profits.
Q3) What is a public franchise? Are all public franchises natural monopolies?
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Chapter 16: Pricing Strategy
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Q1) Which of the following is a reason why a firm would not engage in price discrimination?
A) Price discrimination is illegal in some western states and the owners of firms in these states face civil or criminal prosecution if they engage in price discrimination.
B) Some firms are not able to segment the market for the products they sell.
C) Some firms do not want to violate the law of one price.
D) The transactions costs associated with selling the product exceed the price of the product.
Q2) Refer to Table 16-3. Suppose Julie's marginal cost of providing this service is constant at $7 and she charges each customer according to his or her willingness to pay instead of a uniform price of $7. Which of the following statements is true?
A) Julie is worse off because the demand for her services is reduced.
B) Julie has converted the consumer surplus (from a uniform price) into economic profit.
C) Julie's customers are better off because their consumer surplus has increased.
D) Julie has converted the producer surplus (from a uniform price) into consumer surplus.
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Chapter 17: The Markets for Labor and Other Factors of Production
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Q1) Michael Spence proposed the signaling hypothesis. According to this hypothesis,
A) workers signal their desire to work for a particular firm by the way they answer questions in job interviews.
B) employers signal their preferences for the type of employee they wish to hire through job ads and the questions they ask during job interviews.
C) employers view a college education as a signal that potential workers have certain desirable qualities.
D) high wages are a signal that workers have skills that are highly valued by employers.
Q2) Refer to Figure 17-2. If Becca can sell her bracelets at $3 each, what is the marginal product of the 4th worker?
A) $36
B) 12 bracelets
C) 36 bracelets
D) $144
Q3) If the labor supply curve shifts to the left and the labor demand curve remains unchanged, what will happen to the equilibrium wage and the equilibrium level of employment? Illustrate your answer with a graph.
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Page 19
Chapter 18: Public Choice, Taxes, and the Distribution of Income
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Sample Questions
Q1) Which of the following is an example of a federal mandate?
A) an excise tax
B) the Medicaid program
C) the personal tax exemption
D) the Food and Drug Administration (FDA)
Q2) Refer to Figure 18-9 to answer the following questions.
a. Did the distribution of income become more equal in 2010 that it was in 2009, or did it become less equal? Explain.
b. If area A = 1,600, area B = 200, and area C = 3,200, calculate the Gini coefficient for 2009 and the Gini coefficient for 2010.
Q3) Refer to Table 18-5. The tax system is
A) progressive throughout all levels of income.
B) proportional throughout all levels of income.
C) regressive throughout all levels of income.
D) regressive between $20,000 and $25,000 of income and progressive between $32,000 and $42,000.
Q4) If your income is $40,000 and you pay taxes of $4,650, what is your average tax rate? Show your work.
Q5) What is the difference between the poverty line and the poverty rate?
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Chapter 19: GDP: Measuring Total Production and Income
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Q1) Which component of consumption spending is the greatest in a typical economy?
A) services
B) durable goods
C) nondurable goods
D) new housing
Q2) If the GDP deflator rises from 185 to 190, what is the rate of inflation between the two years?
A) 270%
B) 50%
C) 5%
D) 2.7%
Q3) Refer to Table 19-3. Consider the data above (in billions of dollars) for an economy: Gross domestic product (in billions of dollars) for this economy equals
A) $2,200.
B) $1,600.
C) $1,400.
D) $1,200.
Q4) If the value added of a firm is positive, will the firm necessarily have positive profits?
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Chapter 20: Unemployment and Inflation
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Q1) If the nominal rate of interest is 6.5% and the inflation rate is 3.0%, what is the real rate of interest?
A) -9.5%
B) -3.5%
C) 1.5%
D) 3.5%
E) 9.5%
Q2) Refer to Figure 20-1. Based on the graph of the labor market above, if a minimum wage is set at $5 per hour, which of the following will occur?
A) The unemployment rate will rise.
B) The unemployment rate will fall.
C) The level of unemployment will rise, but the percentage of the labor force unemployed will not change.
D) None of the above will occur.
Q3) The costs to firms of changing prices are called
A) redistribution costs.
B) menu costs.
C) anticipation costs.
D) money illusion costs.
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Page 22
Chapter 21: Economic Growth, the Financial System, and Business Cycles
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Q1) The demand for loanable funds is downward sloping because the ________ the interest rate, the ________ the number of profitable investment projects a firm can undertake, and the ________ the quantity demanded of loanable funds.
A) lower; greater; greater
B) lower; smaller; greater
C) greater; greater; greater
D) greater; smaller; greater
Q2) Use the rule of 70 to illustrate how small differences in growth rates can have a large impact on how rapidly the standard of living in a country increases.
Q3) The response of investment spending to an increase in the government budget deficit is called
A) expansionary investment.
B) private dissaving.
C) crowding out.
D) income minus net taxes.
Q4) Centrally-planned economies tend to grow more quickly than market economies.
A)True
B)False
Q5) Explain why the demand curve for loanable funds has a negative slope.
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Chapter 22: Long-Run Economic Growth: Sources and Policies
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Q1) The developing countries have been catching up to the lower-income industrial countries in terms of economic growth.
A)True
B)False
Q2) The economic growth model predicts that
A) the level of real GDP per capita in poor countries will grow faster than in rich countries. B) the per-worker production function of poor countries will be flatter than the per-worker production function of rich countries.
C) lower-income industrial countries will forever be unable to catch up to higher-income industrial countries.
D) economic growth in rich countries can only be accomplished at the expense of slow or even negative growth in poor countries.
Q3) Suggest two policies the government could pursue to help increase the accumulation of knowledge.
Q4) List four types of government policies which can aid economic growth.
Q5) What features made England in the eighteenth century the place where the Industrial Revolution occurred?
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Chapter 23: Aggregate Expenditure and Output in the Short Run
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Q1) Discuss the leading causes of the Great Depression. Use the 45-degree line diagram to show how they caused a decline in GDP.
Q2) If the consumption function is defined as C = 7,250 + 0.8Y, what is the autonomous level of consumption expenditure?
A) $5,800
B) $7,250
C) $9,062.50
D) $9,700
Q3) Consumption spending is $5 million, planned investment spending is $8 million, unplanned investment spending is -$2 million, government purchases are $10 million, and net export spending is $2 million. What is GDP?
A) $15 million
B) $23 million
C) $25 million
D) $27 million
Q4) Why is the aggregate demand curve downward sloping while the aggregate expenditure line is upward sloping?
Q5) What is the main reason for changes in GDP in the short run?
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Chapter 24: Aggregate Demand and Aggregate Supply Analysis
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Q1) The long-run aggregate supply curve will shift to the right if
A) the economy experiences technological change.
B) there is a decrease in population.
C) the economy experiences high levels of inflation.
D) net exports decrease.
Q2) Using an aggregate demand graph, illustrate the impact of an increase in the price level on aggregate demand.
Q3) Briefly describe monetarism and the monetary growth rule.
Q4) Using aggregate demand and aggregate supply, explain what happens in the short run if the Federal Reserve raises interest rates in the economy. Be sure to detail what happens to aggregate demand, the price level, the level of GDP, and unemployment. Assume that the economy is at full employment before the interest rate increase.
Q5) Stagflation occurs when inflation ________ and GDP ________.
A) rises; rises
B) rises; falls
C) falls; rises
D) falls; falls
Q6) What is a supply shock, and why might a supply shock lead to stagflation?
Page 26
Q7) Why does the short-run aggregate supply curve slope upward?
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Chapter 25: Money, Banks, and the Federal Reserve System
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Q1) A cash withdrawal from the banking system
A) decreases reserves.
B) decreases deposits.
C) decreases excess reserves.
D) All of the above are correct.
Q2) The quantity equation becomes the basis for a theory when we assume that velocity of money is constant.
A)True
B)False
Q3) Your checking account balance is included in your bank's assets.
A)True
B)False
Q4) To offset the effect of households and firms deciding to hold less of their money in checking account deposits and more in currency, the Federal Reserve could
A) raise the required reserve ratio.
B) buy Treasury securities.
C) raise the discount rate.
D) lower bank taxes.
Q5) What is the principle monetary policy tool used by the Fed. Why?
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Chapter 26: Monetary Policy
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Q1) Which of the following is not an argument against inflation targeting?
A) Inflation targeting reduces the flexibility of the Fed to pursue other policy goals.
B) Inflation targeting assumes that the Fed can accurately forecast future inflation rates.
C) Inflation targeting makes monetary policy ineffective because the targets are publicly announced.
D) Inflation targeting holds the Fed accountable for an inflation goal, but may make it less likely the Fed will achieve other goals.
Q2) Refer to Figure 26-7. Suppose the economy is in a recession and the Fed pursues an expansionary monetary policy. Using the static AD-AS model in the figure above, this would be depicted as a movement from
A) A to B.
B) B to C.
C) C to B.
D) A to E.
E) C to D.
Q3) Give an example of a monetary policy target. Explain why the Fed uses policy targets.
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Chapter 27: Fiscal Policy
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Q1) A decrease in the tax rate will ________ the disposable income of households and ________ the size of the multiplier effect.
A) increase; increase
B) decrease; increase
C) increase; decrease
D) decrease; decrease
E) increase; not change
Q2) The tax wedge is the difference between the A) amount of taxes needed to balance the federal budget and the actual amount of taxes.
B) amount of taxes needed to pay off the national debt and the actual amount of taxes. C) pretax and posttax returns to an economic activity.
D) nominal and real interest rates.
Q3) Tax cuts on business income increase aggregate demand by increasing A) business investment spending.
B) consumption spending.
C) government spending.
D) wage rates.
Q4) What is fiscal policy, and who is responsible for fiscal policy?
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Chapter 28: Inflation, Unemployment, and Federal Reserve Policy
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Q1) Refer to Figure 28-3. The shifts shown in the short-run and long-run Phillips curves between period 1 and period 2 could be explained by A) an increase in the expected inflation rate from 4.0 to 5.5 percent.
B) an increase in the natural rate of unemployment from 5.5 to 6.8 percent. C) either an increase in expected inflation from 4.0 to 5.5 percent or an increase in the natural rate of unemployment from 5.5 to 6.8 percent.
D) None of the above is correct.
Q2) If workers and firms have rational expectations, they understand that ________ monetary policy will raise the inflation rate, so actual inflation ________ expected inflation.
A) expansionary; will be equal to B) expansionary; will be greater than C) contractionary; will be equal to D) contractionary; will be less than E) expansionary; will be less than
Q3) Last year, the unemployment rate was 4 percent and the inflation rate was 3 percent. If the natural rate of unemployment is 3 percent, how do you expect inflation to change?
Q4) Why is the credibility of the Fed's policy announcements particularly important?
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Chapter 29: Macroeconomics in an Open Economy
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Q1) Net foreign investment is equal to
A) capital inflows minus capital outflows.
B) foreign direct investment.
C) the balance of trade.
D) net foreign portfolio investment plus net foreign direct investment.
Q2) What are the three main sets of factors that cause the supply and demand curves in the foreign exchange market to shift?
Q3) If the balance on the current account is $346 billion and the balance on the financial account is -$204 billion, what is the balance on the capital account, assuming no statistical discrepancy?
A) $550 billion
B) $142 billion
C) $0
D) -$142 billion
Q4) Saving exceeds domestic investment in Japan, which generates a financial account deficit in Japan's balance of payments.
A)True
B)False
Q5) What is the difference between net exports and the current account balance?
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Chapter 30: The International Financial System
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Q1) When foreign investors in Thailand began to realize that Thailand could not maintain its peg to the dollar indefinitely, they began to ________ in Thailand and exchange ________. This change in investment by foreigners is termed capital flight.
A) purchase more investments; dollars for baht to purchase these investments
B) sell off their investments; the baht they received for dollars
C) sell off their investments; the dollars they received for baht
D) purchase more investments; baht for dollars to purchase these investments
Q2) Under pressure from Japan, the United States and Europe, China announced it switched from pegging the yuan against the dollar to linking the value of the yuan to a 'basket' of currencies. The result of this change was
A) the value of the yuan increased slightly relative to the dollar.
B) the value of the yuan has become very responsive to changes in demand and supply in the foreign currency market.
C) the value of the yuan has increased dramatically and is beginning to remove the trade imbalance between the United States and China.
D) the value of the yuan has decreased dramatically and has further spurred Chinese exports.
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