Define how contributes to volatility of the exchange rate

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Reference no: EM13791392

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 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: EM13791392

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