The Chinese government fixes its exchange rate above its free-market equilibrium level.Its purpose in keeping the Chinese currency depreciated is probably to
A) make it more affordable for Chinese firms to import new materials.
B) make it more affordable for Chinese households to purchase consumer goods from the United States.
C) maintain respect for the Chinese yuan.
D) help maintain a current account deficit and thus a capital inflow to China.
E) make Chinese exports more attractive to the rest of the world.
Correct Answer:
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