Which of the Following Is Correct

question 138

Multiple Choice

Which of the following is correct?

• A) If a nation changes its money supply, it disrupts the long-run PPP equilibrium, which causes traders to purchase in the cheaper markets and sell in the pricier markets, which, in turn, causes demand for the domestic currency (vis-à-vis the international currency) to be lower.
• B) The peg changes the long-run expectation of exchange rates, and this is a determinant of short-run rates which, in turn, affect deposit rates of return.
• C) The Federal Reserve has complete control of monetary policy; it is independent of political control, so, in the United States at least, monetary policy can coexist with an exchange rate peg.
• D) Pegging its own currency causes a nation to lose political control, and it is then forced to sell its own resources at world prices.

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Definitions:

Shitao

A Chinese monk and painter of the late Ming and early Qing dynasties, renowned for his innovative landscape paintings and poetic inscriptions.

Qing Dynasty

The last imperial dynasty of China, ruling from 1644 to 1912, known for its significant cultural, social, economic, and territorial expansion.

Jesuit Missionaries

Members of the Society of Jesus, a Roman Catholic religious order, who travel abroad to evangelize or perform ministry work, often in challenging conditions or remote locations.

Imperial Court

The household and governing body surrounding a monarch or emperor, typically involving a complex hierarchy and rituals.