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Question D: Balance of Pavilion! [15 points] 1) Explain the notion of Balance of Payment and the meaning of +!- sign of its components. [6
Question D: Balance of Pavilion! [15 points] 1) Explain the notion of Balance of Payment and the meaning of +!- sign of its components. [6 points] 2) Between 2001 and 2015, China ran persistent current account surplus and nancial account surplus (net of foreign reserve accumulation). Explain how these affect China's CNY exchange rate. [5 points] 3) What can People's Bank of China {China's central bank) do to stabilize its exchange rate? Is there any undesirable side-effect? [5 points]
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