In order to level the playing field in trade between the U.S. and China, U.S. policymakers have called upon China's government to allow the yuan to float freely, as other world currencies. Through government regulation, China maintains an undervalued currency, which results in
A) more buying power for Chinese consumers who want to purchase U.S. goods and goods from other countries.
B) maintaining robust Chinese exports and a favorable balance of trade for China.
C) developing better relations with industrialized countries who want to increase the value of their exports.
D) stability and strength of the Chinese yuan against the U.S. dollar and the euro.

Question

Quizplus · Accepted Answer

A favorable balance of trade exists when a country exports a greater value of goods than it imports. By keeping the yuan undervalued compared to other currencies, China makes it more appealing for other countries to purchase its products, and less appealing for its markets to purchase imported goods.

In Order to Level the Playing Field in Trade Between