Assume the U.S. government wants to hold the value of the dollar at $1.00 U.S. equals 7 Chinese yuan, but it finds that the value of yuan is depreciating against the U.S. dollar. What would be an appropriate policy to reverse this trend?
A. Increase the money supply in the U.S.
B. Increase government spending within the U.S.
C. Sell U.S. dollars.
D. Buy U.S. dollars.
Answer: C
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