In Hong Kong, the Monetary Authority Can Only Increase the Monetary

question 113

Multiple Choice

In Hong Kong, the monetary authority can only increase the monetary base if they accumulate more U.S.dollars because:

• A)The currency of Hong Kong is the U.S.dollar
• B)The monetary authority in Hong Kong operates a currency board where its sole objective is to fix the exchange rate between its currency and the U.S.dollar
• C)The IMF required Hong Kong to peg its currency to the U.S.dollar in order to obtain a loan
• D)Hong Kong has received substantial funding from the U.S.Treasury and the loans were conditional on maintaining the value of the Hong Kong currency

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Definitions:

Payroll Tax

A payroll tax is a tax imposed on both employers and employees; it is based on wages that employers pay their staff.

Nominal Wages

Are the amounts paid to employees in current dollar terms, without adjusting for inflation or purchasing power.

Income Cutoff

A specified income level below or above which a person or family is eligible or not eligible for certain financial benefits or services.

Baby Boom Generation

The demographic cohort following World War II, typically defined as those born from 1946 to 1964, known for its significant size and economic impact.