Figure 15.10 Alt text for Figure 15.10: In figure 15.10, a graph illustrates the quantity of yuan traded against the exchange rate.
Long description for Figure 15.10: The x-axis is labelled, quantity of yuan traded in millions per day.The y-axis is labelled, exchange rate, Canadian dollar against the yuan.Supply curve S, is a straight line which slopes up from the bottom left corner to the top right corner.Demand curve D, is a straight line which slopes down from the top left corner to the bottom right corner.The curves intersect at point A, (600, 0.13).Point A, and unmarked points (800, 0.11), (500, $0.14), (700, $0.14), and (400, 0.11)are all connected to their corresponding values on the x and y-axes with dotted lines.
-Refer to Figure 15.10.Suppose the pegged exchange rate is $0.14/yuan and Canadian consumers increase their demand for Chinese products.Using the figure above, this would

Question

Figure 15.10  Alt text for Figure 15.10: In figure 15.10, a graph illustrates the quantity of yuan traded against the exchange rate.
Long description for Figure 15.10: The x-axis is labelled, quantity of yuan traded in millions per day.The y-axis is labelled, exchange rate, Canadian dollar against the yuan.Supply curve S, is a straight line which slopes up from the bottom left corner to the top right corner.Demand curve D, is a straight line which slopes down from the top left corner to the bottom right corner.The curves intersect at point A, (600, 0.13).Point A, and unmarked points (800, 0.11), (500, $0.14), (700, $0.14), and (400, 0.11)are all connected to their corresponding values on the x and y-axes with dotted lines.
-Refer to Figure 15.10.Suppose the pegged exchange rate is $0.14/yuan and Canadian consumers increase their demand for Chinese products.Using the figure above, this would

Quizplus · Accepted Answer

An increase in Canadian demand for Chinese products would lead to more Canadian dollars being exchanged for Chinese yuan, increasing the demand for yuan. This would decrease the surplus of yuan because more yuan are being bought with Canadian dollars, moving the market closer to equilibrium or increasing the demand for yuan relative to its supply at the pegged rate.

Figure 1510 Alt Text for Figure 15