China began pegging its currency, the yuan, to the U.S.dollar in 1994.Because the yuan was ________ at the pegged exchange rate, the level of Chinese exports remained ________ than they would have been if the exchange rate had been allowed to float freely.

Question

Quizplus · Accepted Answer

When a currency is undervalued, it makes the country's exports cheaper and more competitive in the global market, leading to higher levels of exports than if the currency were valued higher or allowed to float freely.

China Began Pegging Its Currency, the Yuan, to the U