In 2015, China was the world’s largest exporter of manufactured goods and a major importer of oil and minerals. China devalued the yuan (renminbi) by 2%.
According to economic theory, what would have been a consequence of this devaluation?
1 )
China paid less in foreign currencies for imports.
China reduced its demand for oil and minerals.
3 )
China’s exports became less competitive.
4 )
China’s trading partners improved their balance of trade with China.
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