Assume that China and the U.S.are in a managed floating exchange rate agreement.Suppose that the Fed decreases the money supply by 50%.China's central bank lets the exchange rate partly adjust and also intervenes in foreign exchange market.What would happen to the foreign reserve position for the U.S.and the exchange rate $/yuan?
A) Foreign reserves decrease and exchange rate decreases.
B) Foreign reserves increases and exchange rate increases.
C) Foreign reserves decrease and exchange rate increases.
D) Foreign reserves increase and exchange rate decreases.

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The Answer of Assume that China and the U.S.are in a managed floating exchange rate agreement.Suppose that the Fed decreases the money supply by 50%.China's central bank lets the exchange rate partly adjust and also intervenes in foreign exchange market.What would happen to the foreign reserve position for the U.S.and the exchange rate $/yuan?
A) Foreign reserves decrease and exchange rate decreases.
B) Foreign reserves increases and exchange rate increases.
C) Foreign reserves decrease and exchange rate increases.
D) Foreign reserves increase and exchange rate decreases.

Assume That China and the U