6. Exchange Rate Market: and RMB Table 1: CNYIUSD Exchange Rate Date CNYIUSD Parity rate 30 Mar 2020 7.0447 27 Mar 2020 7.0427 26 Mar 2020 7.0692 25 Mar 2020 7.0742 24 Mar 2020 7.0999 23 Mar 2020 7.0940 A) On March 23, 2020. U.S. Fed announces the innite quantitative easing policy, push the U.S. interest rate level to zero. Use the Foreign Exchange Rate Model to predict the shortrun appreciationf depreciation of RMIB. (7 marks) B) What would be the short run implication if market believes that U.S. quantitative easing is a tongrun policy? (6 marks) C) In the second half year of 2020, the Chinese fully recovered from the Covid- 19 crisis, and its reported that current account surpluses reach its highest level in the recent years. Together with this fact, use the long run exchange rate determinant theory to explain the following USDICNY parity rate dynamics in Figure 1: (horizontal ne is date and vertical line is the USD/CNY parity rate} (7 marks) Figure 1: The dynamics of USD/CNY 19 Dec 2019 22 Jun 2020 1? Dec 2020