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Q. What is the purpose of the following figure?
Answer:
The use of the figure is to show the inflation convergence within the six original EMS members. The figure demonstrates the difference between domestic inflation and German inflation for six of the original EMS members. As of 1997 every national inflation rates were very close to the German levels.
Q. How A Central Bank Fixes the Exchange Rate? Answer: The Central bank should always be willing to trade currencies at the fixed exchange rate with the private actors in the f
define stolper samuelson theorem
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