Which one of the following is not a major factor that contributed to large trade deficits in the United States in the period 2002-2007?
A)a declining saving rate coupled with a rising investment rate in the U.S.
B)a U.S. economy growing faster than its trading partners
C)large trade deficits with OPEC economies
D)flexible exchange rate between the U.S. dollar and the Chinese yuan

Question

Quizplus · Accepted Answer

The exchange rate between the U.S. dollar and the Chinese yuan was not flexible during the period 2002-2007; it was largely fixed or pegged by China to maintain its export competitiveness, which does not align with the concept of a flexible exchange rate contributing to the U.S. trade deficits.

Which One of the Following Is Not a Major Factor