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.
w.nytimes.com, 11/26/20
Other things remaining the same, which of the following components will decrease in response to th bank's actions?
i. exchange rate
ii. interest rate
iii. investment
A) ii and iii only.
B) i, ii and iii.
C) ii only.
D) i and ii only.
Correct Answer:
Verified
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