China fixes its exchange rate (yuan per units of foreign currency) at a rate well above its free- market equilibrium level. In order to maintain this exchange rate, and to prevent its currency from , the Chinese central bank is rapidly accumulating .
A) appreciating; reserves of its domestic currency
B) depreciating; foreign- exchange reserves
C) depreciating; U.S. dollars
D) depreciating; reserves of its domestic currency
E) appreciating; foreign- exchange reserves
Correct Answer:
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