Suppose that the U. S. dollar-Chinese yuan exchange rate is fixed by the U. S. and Chinese governments. Assume also that labor is immobile between the United States and China due to high transportation costs. Which of the following situations is likely to occur if there is a simultaneous increase in the demand for U. S. goods and a decrease in the demand for Chinese goods? a. The U. S. unemployment rate increases, and the country undergoes bad economic times for a sustained period.
b. The Chinese unemployment rate rises at first, but it soon drops as unemployed Chinese move to the United States for employment.
c. The Chinese unemployment rate rises at first, but then it drops as Chinese yuan depreciate against U. S. dollars.
d. The Chinese unemployment rate increases, and the country undergoes bad economic times for a sustained period.