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In early​ 2016, the global economy was hit by a series of​ shocks, many of which...

In early​ 2016, the global economy was hit by a series of​ shocks, many of which traced their origins to decisions being made in China. Not all sectors of the economy were affected by these shocks in the same ways. Why might some sectors be more harmed by changes in China than​ others?

1. Some sectors of the economy may be more harmed because they are

▼

A. more dependent

B. less dependent

on other parts of the world than others.

2. Sectors of the economy that produce goods for export to China are going to be

▼

A. less affected

B. strongly affected

by changes in aggregate supply in China. Sectors which produce​ non-traded goods are going to be much

3. ▼

A. less sensitive

B. more sensitive

to changes in the state of the Chinese economy.

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Answer #1

1. Option A

2. Option B

3. Option A

Explanation: More dependent sectors would be more harmed. When Chinese economy faces downturn, it will import less. Non-traded goods will not be affected much.

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