The People's Bank of China announced that it was lowering by 1.08 percentage points the one- year lending rate in response to the slowdown in the Chinese economy. This rate is the Chinese equivalent of the federal funds rate in the United States.
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Other things remaining the same, there will be a (n) in the exchange rate, a(n) in i and a(n) in exports.

Question

Quizplus · Accepted Answer

Lowering the lending rate typically leads to a decrease in the exchange rate, a decrease in domestic interest rates, and an increase in exports due to a weaker currency making goods cheaper abroad.

The People's Bank of China Announced That It Was Lowering