Fixed-exchange-rate system

Suppose that China operates a fixed-exchange-rate system and is running a large current-account surplus. The government supports the system by buying large quantities of dollars in the foreign exchange market. Price Currency Units of foreign currency per U.S. dollar U.S. dollars per unit of foreign currency Dollar (Canada) Real (Brazil) Yuan (China) Peso (Mexico) Pound (Britain) Euro Dollar (Zimbabwe) TABLE 27-4. 0.9861 1.656 6.942 10.38 0.5054 0.6368 255,771,415 1.014 (US$/Canadian dollar) ( ) ( ) ( ) ( ) ( )

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