Steps adopted by China to cope with economic downturn

Q.  What measures have been adopted by the China, to support a stuttering economy and plunging stock market that sent shock waves around the globe?
- Published on 01 Aug 15

a. Cut Interest Rates
b. Lowered the amount its reserve banks must hold
c. Disinvested the Govt. Shares
d. All of these
e. Both A and B

ANSWER: Both A and B
China's central bank has cut interest rates and lowered the amount its reserve banks must hold. People's Bank of China cut its key lending rate by 0.25 percentage points to 4.6 percent, an effort to calm stock markets. It is the fifth interest rate cut since November and will come into effect from 26th Aug’15. This move has boosted global share prices further, however, US stocks ended in descent after initials gains. London's FTSE 100 jumped 3 per cent, while Germany's Dax gained 5 percent and the Paris Cac rose by 4.1 percent.

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