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One of the major complaints regarding foreign exchange

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Reference no: EM13481258

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:

o trade-balance

o currency substitution

o differential speed of adjustment of asset markets versus goods markets

o the news

• Explain each of the above.

Reference no: EM13481258

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