assignmentcafe.com – Why do you think that the Chinese historically pegged the value of the yuan to the U.S. dollar?/2022

assignmentcafe.com –

. Reread the Country Focus “China’s Exchange Rate Regime,” and then

 

answer the following questions:

 

Page 318

 

a. Why do you think that the Chinese historically pegged the value of the

 

yuan to the U.S. dollar?

 

b. Why did the Chinese move to a managed-float system in 2005?

 

c. What are the benefits that China might gain by allowing the yuan to

 

float freely against other major currencies such as the U.S. dollar and

 

the euro? What are the risks? What do you think they should do?

 

d. Is there any evidence that the Chinese kept the level of their currency

 

artificially low in the past to boost exports? Is China keeping it

 

artificially low today?

 

e. What policy stance should the United States and the EU adopt toward

 

China with regard to how it manages the value of its currency?