Between 2000 and 2005, China pegged its currency to the dollar by

Question

Quizplus · Accepted Answer

To peg a currency to another, a country typically needs to buy or sell reserves in the foreign exchange market. In this case, China would need to buy or sell dollars in order to keep its currency pegged to the dollar. The answer D states that China increased its holdings of dollar reserves and decreased its holdings of domestic currency. This aligns with the strategy of pegging its currency to the dollar.

Between 2000 and 2005, China Pegged Its Currency to the Dollar