If China Wanted to Maintain a Fixed Nominal Exchange Rate

Multiple Choice

If China wanted to maintain a fixed nominal exchange rate to the United States in the long run:

A) the price level in China would have to move in tandem with the U.S. price level.
B) Chinese interest rates would have to move in tandem with U.S. interest rates.
C) the law of one price would have to hold for at least one good.
D) the Chinese would have to want to buy American goods.
E) the Chinese would want to sell their financial assets.