Question

Which of the following is NOT an event that occurred when the Chinese yuan was pegged to the U.S. dollar?

• The Chinese funded their exchanges by printing more money.

• The effect on Chinese GDP was negative, and the effect on U.S. GDP was positive.

• Americans demanded more yuan than the Chinese demanded dollars for exchanges.

• Chinese exports to the United States increased.

Answer 1

Option B

This currency manipulation has helped China thrive, as the nation's economy has repeatedly experienced robust growth rates of more than 10% over the last decade. Due to robust growth, China doubled its gross domestic product (GDP) per capita over the course of a decade.By pegging its currency, a country can gain comparative trading advantages while protecting its own economic interests.A pegged rate, or fixed exchange rate, can keep a country's exchange rate low, helping with exports.