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Although the Pegged Exchange Rate Between the Yuan and the Dollar

Question 117

Multiple Choice

Although the pegged exchange rate between the yuan and the dollar has undervalued the yuan,China had been reluctant to abandon the peg for fear that abandoning the peg would


A) increase exports and increase the current account deficit.
B) reduce capital inflows.
C) reduce exports and reduce economic growth.
D) increase Chinese holdings of dollars.

Correct Answer:

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