Unformatted text preview: D) US dollar appreciates against other currencies. Solutions: D) – IS curve shifts right but LM remains the same. A consequence of that is an appreciation of US dollar but no change in output. Fiscal policy under floating regime is not effective (for a small country). 3. Currently, the exchange rate between the US dollar and the Chinese RMB is: A) fixed by the Chinese government. B) floating according the buy and sell of Chinese RMB and US dollar in the market. C) determined by a basket of international currencies. D) neither above. Solution: C)...
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This note was uploaded on 02/13/2012 for the course ECON 410 taught by Professor Hernandez-verme during the Spring '08 term at Texas A&M.
- Spring '08