The monetary transmission mechanism in an OPEN economy is more complicated than it is in a closed economy because the effects of domestic monetary contraction or expansion are     weakened because changes in the domestic money supply cause changes in the exchange rate which then offset the changes in desired investment.     strengthened because domestic interest rates must be equal to those in the rest of the world.     strengthened because changes in autonomous expenditure cause monetary effects that influence interest rates in the rest of the world.     weakened because changes in autonomous expenditure cause monetary effects that influence interest rates in the rest of the world.     strengthened because changes in the domestic money supply cause changes in the exchange rate, which then reinforce the changes in desired investment.

A U.S. company wants to buy its televisions from a Chinese company. The Chinese company sells its TVs for​ 1,200 yuan each. The current exchange rate between the U.S. dollar and the Chinese yuan is​ $1 = 6 yuan.   How many U.S. dollars will the U.S. company have to convert into yuan to pay for each​ television?   A. ​$1,200   B. ​$7,200   C. ​$200   D. ​$100

A. Canada produces natural resources (coal, natural gas, and others), the demand for which has increased rapidly as China and other emerging economies expand. i. Explain how growth in the demand for Canada's natural resources would affect the demand for Canadian dollars in the foreign exchange market. Explain how the supply of Canadian dollars would change. ii. iii. Explain how the value of the Canadian dollar would change. iv. Illustrate your answer with a graphical analysis. 1

3. If interest rates increase in a country with a fixed exchange rate, what will the central bank do? A. Buy the country's currency B. Sell the country's currency C. Engage in contractionary fiscal policy 4. The United States has floating exchange rates. Suppose there is an increase in inflation in the United States. What will happen? A. The U.S. central bank will sell U.S. currency so the exchange rate remains constant B. The U.S. central bank will buy Euros so the exchange rate remains constant C. The exchange rate (price of a dollar) will go up D. The exchange rate (price of a dollar) will go down 5. Belize uses a fixed exchange rate, with one Belize dollar equal to one half of a U.S. dollar. There is an increase in U.S. citizens traveling to Belize on vacation. What will the central bank do? A Buy the country's currency B. Sell the country's currency Sell bonds to banks C.