In Order to Maintain a Pegged Exchange Rate in China

question 30

Multiple Choice

In order to maintain a pegged exchange rate in China:

• A) the Chinese government must prevent Chinese citizens from trading goods or services with other countries.
• B) the Chinese government must prevent Chinese citizens from purchasing assets denominated in foreign currencies.
• C) the Chinese government must adjust the supply of the yuan in world markets.
• D) at least one foreign country must also maintain a pegged exchange rate.
• E) no other country that China shares a geographical border with can maintain a pegged exchange rate.

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Definitions:

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In economics, a curve that represents a series of combinations of two goods that provide a consumer with equal levels of utility.

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