In the trade relationship with China, why is the US dollar in more demand than the Chinese yuan?
A) More people demand the yuan domestically in China, so it is not used for imports and exports.
B) The dollar is the common transaction currency between the two countries.
C) The yuan is pegged to the US dollar.
D) Formal institutions and regulations demand the trade be conducted in the dollar.

Question

Quizplus · Accepted Answer

The dollar is the common transaction currency between the two countries, meaning both China and the United States use it for their imports and exports. This creates a greater demand for the dollar in the trade relationship between the two countries. While the yuan is increasingly being used for trade, the dollar remains the dominant currency in the relationship.

In the Trade Relationship with China, Why Is the US