Question

QUESTION 41

1. If the Chinese Yuan devalues against the US dollar, then​

   	a.	​Both the US exporters and Chinese exporters would benefit
   	b.	​The US exporters would be hurt while the Chinese exporters would benefit
   	c.	​The US exporters would benefit while the Chinese exporters would be hurt
   	d.	​Both the US exporters and Chinese exporters would be hurt

Answer 1

It has been provided that Chinese Yuan devalues against the US dollar.

This implies that now more Yuan can be purchased with each unit of dollar.

This will make the Chinese made goods cheaper for US consumers but will make the US made goods expensive for Chinese consumers.

So, Chinese exports to US will increase while US exports to China will decrease.

Thus,

If the Chinese Yuan devalues against the US dollar, then the US exporters would be hurt while the Chinese exporters would benefit.

Hence, the correct answer is the option (b).