Question

The Chinese government announces that on December 31, 20xx the value of the Yuan will officially change from 6.40 Yuan/$ to 6.00 Yuan/$. This would be an official ________ of the Chinese currency of ________.

Answer 1

Answer:

Revaluation; 6.25%

Explanation:

Given that,

Change in the exchange rate of china and United states

= 6.40 Yuan/$ to 6.00 Yuan/$

Total change = 6.40 Yuan/$ - 6.00 Yuan/$

                       = 0.40 Yuan/$

This means that the value of Chinese yuan is appreciated against the dollar because now a Chinese person have to pay less for any product imported from the united states.

Percentage appreciation in Yuan:

= (Total change ÷ Initial value) × 100

= (0.40 ÷ 6.40) × 100

= 0.0625 × 100

= 6.25%