China Holds a Massive Amount of Foreign Exchange Reserves

question 22

Multiple Choice

China holds a massive amount of foreign exchange reserves. As of 2010 they held nearly $2,500 billion. This huge foreign exchange reserve should allow China to

• A) manage the value of the Chinese yuan to maintain competitiveness in world markets.
• B) maintain a relatively stable managed fixed exchange rate for the yuan for years to come.
• C) remain a very important player in world trade for at least the next several years.
• D) All of the above.