Question

In order to level the playing field in trade between the U.S. and China, U.S. policymakers have called upon China's government to allow the yuan to float freely, as other world currencies. Through government regulation, China maintains an undervalued currency, which results in

Answer 1

Answer:

b. Maintaining robust Chinese exports and a favorable balance of trade for China

Explanation:

If the currency of a country is "undervalued," the cost it can be traded for other foreign currencies is too small.

A weak national currency boosts the country's exports on world markets and also increases the cost of imports. Higher volumes of exports spawn economic growth, while priced imports have the same impact as domestic equivalents to imported goods are opted by consumers rather than the pricy import.

Answer 2

Answer:

The answer is B- Maintaining robust Chinese exports and a favorable balance of trade for China.

Explanation:

According to the Chinese government, a weaker exchange rate will result in competitive exports and an increase in demand for export of Chinese goods. The economic growth of China is dependent on exports, hence to enable increased growth the value of the Yuan (China's currency) plays a key role by maintaining an undervalued currency to boost expert and therefore boost growth in the economy.