One Consequence of China Operating a Crawling Peg Is That

question 27

Multiple Choice

One consequence of China operating a crawling peg is that China

• A)is accumulating U.S. dollar reserves.
• B)will eventually run out of foreign reserves, and the yuan will depreciate.
• C)will eventually run out of foreign reserves, and the yuan will appreciate.
• D)will become more competitive in the long run.
• E)is slowing its economic growth.

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Definitions:

Marginal Cost

The cost incurred by producing one additional unit of a product.

Dispose of Cars

The method of disposing of unwanted or obsolete vehicles by means such as recycling, selling, or scrapping.

Variable Costs

Costs that change in proportion to the level of production or business activity.

Square Feet

A unit of area measurement in the Imperial and U.S. customary measurement systems, commonly used to express the size of a space.