China began pegging its currency,the yuan,to the dollar in 1994.Because the yuan was ________ at the pegged exchange rate,the level of Chinese exports remained ________ than they would have been if the exchange rate were allowed to float freely.

Question

Quizplus · Accepted Answer

China's currency, the yuan, was undervalued at the pegged exchange rate, which made Chinese exports cheaper and more competitive internationally, thus keeping the level of exports higher than it would have been under a freely floating exchange rate.

China Began Pegging Its Currency,the Yuan,to the Dollar in 1994