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

Question

Quizplus · Accepted Answer

A pegged exchange rate means that the value of the yuan is artificially maintained at a lower level than its market value. This makes Chinese exports cheaper and more attractive to foreign buyers, boosting Chinese exports. Abandoning the peg would increase the value of the yuan, making Chinese exports more expensive and less competitive, leading to a reduction in exports.

Although the Pegged Exchange Rate Between the Yuan and the Dollar