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Suppose neverland had a fixed exchange rate

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Suppose Neverland had a fixed exchange rate, and is committed to keeping it fixed through open market operations (i.e. the central bank buying and selling currency to keep it fixed.) i. If Ms. Tinker Bell raised domestic interest rates now, what will happen to the exchange rate? What should your CEO, Capt. Hook expect Ms. Tinker Bell to do? Will it impact your company's operations in Neverland?

Reference no: EM131443268

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