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Criticism from the viewpoint of the proponents of the flexible exchange rate regime.
Economic agents can hedge exchange risk through forward contracts and other methods. They don’t comprise to bear it if they choose not to. Additionally, under a fixed exchange rate regime, governments frequently restrict international trade in order to keep the exchange rate. This is a self-defeating measure. What’s good about the fixed exchange rate if international trade require being restricted?
There is some discussion on whether Multinational Corporations (MNC's) enhance risk when borrowing foreign currencies. Those in favor of borrowing state that lower costs of financi
Adapted from: Henderson, S, Peirson, G & Herbohn, K 2008, Issues in financial accounting, 13th edn, Pearson Education Australia, Frenchs Forest.For each of the following independen
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