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Which of the Following Is True About the Exchange Rate

Question 216

Multiple Choice

Which of the following is true about the exchange rate between the yuan and the dollar?


A) Any country that establishes a fixed exchange rate that undervalues the currency must intervene continuously to maintain that rate
B) The official exchange rate chronically overvalues the Chinese yuan relative to the dollar
C) Chinese authorities do not ever need to exchange yuan for dollars in foreign exchange markets
D) The increased demand for the yuan keeps the yuan up
E) The increased supply of the dollar keeps the dollar down

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