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China Has Large Holdings of U

Question 2

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China has large holdings of U.S. Treasury bonds. Suppose China decide to sell the majority of these bonds. If an American was thinking of refinancing their house, how would China's action affect their decision to refinance?


A) The person would want to wait to refinance as interest rates should fall.
B) The person would want to wait to refinance as interest rates should rise.
C) China's actions should not affect the decision to refinance in any way.
D) The person would want to refinance as soon as possible as interest rates should fall.

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