15. If China wanted to maintain both monetary autonomy and a fixed nominal exchange rate in regard to the United States in the long run, (a) the Chinese would want to sell their financial assets. (b) the Chinese would have to want to buy American goods. (c) the price level in China would have to move in tandem with the U.S. price level. (d) the law of one price would have to hold for at least one good. (e) Chinese interest rates would have to move in tandem with U.S. interest rates.
15. If China wanted to maintain both monetary autonomy and a fixed nominal exchange rate in regard to the United States in the long run, (a) the Chinese would want to sell their financial assets. (b) the Chinese would have to want to buy American goods. (c) the price level in China would have to move in tandem with the U.S. price level. (d) the law of one price would have to hold for at least one good. (e) Chinese interest rates would have to move in tandem with U.S. interest rates.
Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781305971509
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter9: Application: International Trade
Section: Chapter Questions
Problem 10PA
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