Does an undervalued yuan impose any costs

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1. What policy tool is China using to maintain the yuan at an artificially low level? Are there any potential problems with using this policy tool? What might China do to counter these problems?

2. Does an undervalued yuan impose any costs on the Chinese economy? If so, what are they?

3. Suppose the Chinese government were to cease its foreign exchange market intervention and the yuan climbed to five to the dollar. What would be the percentage gain to investors who measure their returns in dollars?

Reference no: EM131277896

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