If the Chinese government wants to keep the real and nominal exchange rates between the yuan and the U.S. dollar fixed at 8 yuan per dollar, the: inflation rate in China must be constantly lower than the inflation rate in the United States. inflation rate in China must be constantly higher than the inflation rate in the United States. interest rate in China must be higher than the interest rate in the United States. inflation rate in China must be equal to the inflation rate in the United States.

Exchange rate:It is the rate at which the currency of one country is being exchanged with the…

Answered: If the Chinese government wants to keep…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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If the Chinese government wants to keep the real and nominal exchange rates between the yuan and the U.S. dollar fixed at 8 yuan per dollar, the:
	inflation rate in China must be constantly lower than the inflation rate in the United States.
	inflation rate in China must be constantly higher than the inflation rate in the United States.
	interest rate in China must be higher than the interest rate in the United States.
	inflation rate in China must be equal to the inflation rate in the United States.

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