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Q. Explain why it may make sense for the United States, Japan, and Europe to allow their mutual exchange rate to float?
Answer: Even though these regions trade amid each other the extent of that trade is modest compared with regional GNPs as well as interregional labour mobility is low.
Q. Explain why after, say Norway unilaterally pegs the krone to the euro, domestic money market disturbances will no longer affect domestic output despite the continuation of float
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