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One of the major complaints regarding foreign exchange

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Reference no: EM13479652

One of the major complaints regarding foreign exchange rates and flexible exchange rates is that the exchange rates are too volatile when they float.

  • Define how the following contributes to volatility of the exchange rate:
  • trade-balance
  • currency substitution
  • differential speed of adjustment of asset markets versus goods markets the news

Explain each of the above.

Reference no: EM13479652

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