China linked its exchange rate to the U.S.dollar which meant in the 2004-2007 period

Question

Quizplus · Accepted Answer

Linking the exchange rate to the US dollar meant that as the value of the US dollar fell against other currencies, so did the value of the Chinese renminbi. This made Chinese exports cheaper and more competitive on the global market, which led to an increase in exports and a larger trade surplus. Therefore, the correct choice is B, as it depreciated against most other currencies, making its products cheaper.

China Linked Its Exchange Rate to the U