China began pegging its currency,the yuan,to the dollar in 1994.Because the yuan was ________ at the pegged exchange rate,the Chinese government increased its reserves of ________ as the government purchased more ________ to maintain the pegged exchange rate.

Question

Quizplus · Accepted Answer

The yuan was undervalued at the pegged exchange rate, which means it was worth less than it should have been. To maintain this pegged exchange rate, the Chinese government had to purchase more dollars, increasing its reserves of dollars.

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