Explain why would a country currency relatively pegged

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As the Mexican Peso depreciates in value relative to the U.S. dollar, what happens to the price of U.S. goods in Mexico? What happens to the price of Mexican goods in the U.S.?

Explain why would a country (for example China) choose to keep their currency relatively pegged to the U.S. dollar? If the U.S. dollar were to appreciate considerably against most currencies, what would be the effect on Chinese exports to countries other than the U.S.?

Reference no: EM1348053

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