Question

1. Which of the following institution implements monetary policies in China?

Select one:

A. Bank of China

B. People’s Bank of China

C. Agriculture Bank of China

D. The Industrial and Commercial Bank of China

2. Under the linked exchange rate system, which of the following(s) in Hong Kong will change in line with that of US’s?

Select one:

A. Inflation rate

B. Money supply

C. Interest rate

D. All of the above

3.A spot transaction in the foreign exchange market involves the

Select one:

A. exchange of exports and imports at a specified future date.

B. exchange of bank deposits at a specified future date.

C. immediate exchange of exports and imports.

D. immediate exchange of bank deposits.

4.If the interest rate on US dollar deposits increases, holding everything else constant,

Select one:

A. the expected return on US dollar deposits must also increase.

B. the expected return on Hong Kong dollar deposits must decrease.

C. the expected return on Hong Kong deposits must increase.

D. both A and B of the above.

Answer 1

1 (B). People's Bank of China.

2 (B). Money Supply.

3 (D). Immediate exchange of Bank Deposits.

4 (D). Both A & B above.