Assume that China maintains a currency peg to the U.S. dollar. If the peg was abandoned and the yuan - dollar exchange became a floating exchange rate, we can expect:
A
An increase in the rate of domestic economic growth in China.
B
An increase in U.S. interest rates as China reduces purchases of U.S. Treasury debt.
C
Europe would also abandon the peg of the euro to the dollar.
D
An appreciation of the dollar in relation to the yuan.
When the Federal Reserve uses open market operations (OMO) in an expansionary monetary policy:
A
The Fed will purchase stocks from banks, increasing the monetary base.
B
The Fed will decrease the discount rate, decreasing the monetary base.
C
The Fed will buy bonds from banks, increasing bank reserves and increasing the monetary base.
D
The Fed will lower taxes and increase government spending.
Assume that China maintains a currency peg to the U.S. dollar. If the peg was abandoned and the yuan - dollar exchange became a floating exchange rate, we can expect:
A |
An increase in the rate of domestic economic growth in China. |
B |
An increase in U.S. interest rates as China reduces purchases of U.S. Treasury debt. |
C |
Europe would also abandon the peg of the euro to the dollar. |
D |
An appreciation of the dollar in relation to the yuan. |
When the Federal Reserve uses open market operations (OMO) in an expansionary monetary policy:
A |
The Fed will purchase stocks from banks, increasing the monetary base. |
B |
The Fed will decrease the discount rate, decreasing the monetary base. |
C |
The Fed will buy bonds from banks, increasing bank reserves and increasing the monetary base. |
D |
The Fed will lower taxes and increase government spending. |