China maintained a fixed exchange rate to the U.S. dollar between 1996 and 2005, and many said it ________ the exchange rate to ________.

Question

Quizplus · Accepted Answer

Maintaining a fixed exchange rate to the U.S. dollar would mean that the Chinese yuan would have the same value as the U.S. dollar. This would make Chinese exports cheaper in the U.S., which would promote exports. Thus, China would intentionally undervalue the yuan to promote exports.

China Maintained a Fixed Exchange Rate to the U