Oligopoly and monopolistic competition are examples of a market structure called imperfect competition

Suppose the Chinese central bank wants to keep the exchange rate of its currency value constant over time. An increase in the demand for Chinese goods by American residents will lead the Chinese central bank to

A) coordinate with the U.S. central bank in order to increase the supply of the U.S. dollar in the foreign exchange market. B) increase the demand for the Chinese currency in the foreign exchange market. C) use its dollar reserves to buy the Chinese currency in the foreign exchange market. D) sell the Chinese currency in exchange for U.S. dollars in the foreign exchange market.

If Congress increases taxes to balance the federal budget, then to prevent additional unemployment and a recession the Fed can

a. reduce interest rates by increasing the money supply. b. increase interest rates by decreasing the money supply. c. increase interest rates by increasing the money supply. d. reduce interest rates by decreasing the money supply.