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Is risk necessarily a bad thing

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Question: 1. "If you believe that free markets maximize welfare, then you should also believe that a free exchange rate is an integral part of welfare maximization." Discuss.

2. Must the adoption of a flexible exchange rate mean that the rate will actually vary considerably over time? Why or why not?

3. Much discussion concerning floating rates stresses the risks to trade and investment involved with such a system. Is risk necessarily a bad thing? Why or why not?

Reference no: EM132177904

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