The Chinese government's intervention in the foreign exchange market by buying U.S. dollars and selling yuan had the effect of
A. weakening the yuan to decrease the U.S. trade deficit with China.
B. weakening the U.S dollar to increase the U.S. trade deficit with China.
C. strengthening the yuan to decrease the U.S. trade deficit with China.
D. strengthening the U.S dollar to increase the U.S. trade deficit with China.
Answer: D
You might also like to view...
With rational expectations, a policy that would decrease AD would lead to:
a. lower inflation and lower unemployment in the short run if people underestimated the effect of the policy on inflation. b. lower inflation and higher unemployment in the short run if people underestimated the effect of the policy on inflation. c. lower inflation and an indeterminate effect on unemployment in the short run, if people's expectations were correct. d. both (b) and (c).
The velocity of money is
a. money supply divided by prices. b. spending divided by output. c. required monetary reserves divided by income. d. GDP divided by the money supply.
Milton Friedman's assertion that "inflation is a monetary phenomenon" is based on:
A. the assumption of constant nominal GDP growth. B. the assumption that the price level grows at the same rate as real GDP. C. the quantity theory of money. D. the assumption that the central bank increases the money supply by a constant rate every year.
Tariffs and quotas are different in the sense that
a. tariffs cause deadweight losses, while quotas do not cause deadweight losses. b. tariffs raise revenue for the government, while quotas do not raise revenue for the government. c. tariffs enhance the well-being of domestic consumers, while quotas diminish the well-being of domestic consumers. d. tariffs enhance the well-being of domestic producers, while quotas diminish the well-being of domestic producers.