The Chinese yuan is on a fixed rate. If the government of China uses monetary policy to change the exchange rate of the yuan from $0.16 to $0.10, the Chinese yuan has appreciated.

Question

Quizplus · Accepted Answer

Since the Chinese yuan is on a fixed rate, the exchange rate cannot be changed through monetary policy. Therefore, the appreciation or depreciation of the yuan is not determined by the government's monetary policy, but by market forces.

The Chinese Yuan Is on a Fixed Rate