China has a fixed rate regime. They keep their currency in terms of trade, fixed against the US dollar. So, if the US begins to raise interest rates, then what must China do and what could possible happen in their own economy? they must raise their interest rates also and this could create a recession they must appreciate their currency and this could create a recession they must raise their interest rates and tis could create an expansion and create inflation they must appreciate their currency and this could create an expansion and create inflation
China has a fixed rate regime. They keep their currency in terms of trade, fixed against the US dollar. So, if the US begins to raise interest rates, then what must China do and what could possible happen in their own economy? they must raise their interest rates also and this could create a recession they must appreciate their currency and this could create a recession they must raise their interest rates and tis could create an expansion and create inflation they must appreciate their currency and this could create an expansion and create inflation
Chapter6: Government Influence On Exchange Rates
Section: Chapter Questions
Problem 4ST
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E
China has a fixed rate regime. They keep their currency in terms of trade, fixed against the US dollar. So, if the US begins to raise
interest rates, then what must China do and what could possible happen in their own economy?
they must raise their interest rates also and this could create a recession
B they must appreciate their currency and this could create a recession
they must raise their interest rates and tis could create an expansion and create inflation
they must appreciate their currency and this could create an expansion and create inflation
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