During the Chinese experience with pegging the yuan to the dollar, the yuan was ________. As a result, there was a ________ of dollars on the market, and the Chinese government had to purchase dollars to maintain the peg
A) undervalued; shortage B) undervalued; surplus
C) overvalued; shortage D) overvalued; surplus
B
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An import quota is a
A) tariff imposed on goods that are dumped in the country. B) law that prevents ecologically damaging goods from being imported into a country. C) market-imposed balancing factor that keeps prices of imports and exports in equilibrium. D) government-imposed restriction on the quantity of a specific good that can be imported.
Other things the same, as the price level falls, a country's exchange rate
a. and interest rates rise. b. and interest rates fall. c. falls and interest rates rise. d. rises and interest rates fall.
Unanticipated inflation arbitrarily:
A. "penalizes" those who borrow money. B. "taxes" those who receive fixed money incomes. C. "benefits" those who save money. D. "subsidizes" those who receive fixed money incomes.
Explain why the European exchange rate mechanism (ERM) ran into problems in the 1990s
What will be an ideal response?