Which of the following exchange rate policies was undertaken by the Chinese government in 1994?
A. A free-floating exchange rate regime was adopted.
B. The Chinese yuan was revalued against the U.S. dollar.
C. The Chinese yuan was revalued against the euro.
D. The Chinese yuan was pegged to the U.S. dollar.
Answer: D
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If the economy is at full employment, then the unemployment rate
A) is greater than the natural unemployment rate. B) is equal to the natural unemployment rate. C) is below the natural unemployment rate. D) is equal to zero. E) can be anywhere on a short-run Phillips curve.
According to the AS-AD model, when real GDP is less than potential GDP, the unemployment rate is definitely
A) equal to the natural unemployment rate. B) rising. C) falling. D) greater than the natural unemployment rate. E) less than the natural unemployment rate.