Eventually If China Is to Have a High Degree of International

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The Answer is According to the policy trilemma, China will have to give up control of the exchange rate (allow it to float), if it were to allow free capital mobility (unfettered financial flows in and out of the country). At the simplest level, international capital mobility would mean the RMB would trade freely offshore in non-Chinese-controlled markets (e.g., London). A separate exchange rate would be established in these international markets. Having two prices for the same financial asset (the RMB) is not sustainable over the long run since that would create tremendous arbitrage opportunities.

Eventually If China Is to Have a High Degree of International

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Eventually If China Is to Have a High Degree of International

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Correct Answer:VerifiedShow Answer

Correct Answer:
Verified