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Q. Present the case for floating exchange rates.
Answer:
1. Monetary policy autonomy
Governments would able to use financial policy to reach internal and external balance. No country possible forced to import inflation and deflation from abroad.
2.Symmetry
The United States would no longer is able to set world monetary conditions all by itself. The United States would have the similar opportunity the same as other countries to influence its exchange rate against foreign currencies.
3. Exchange rates like automatic stabilizers.
The agonizing and long periods of speculation preceding exchange rate realignments wouldn't take place under floating.
Q. Explain why under fixed exchange rate, monetary policy is ineffective whereas under floating exchange rate it is effective in rising output. Answer: In floating by purchasi
How is the foreign exchange rate determined?
You will submit a report that shows your investigation of your focus question. Your report must be 1500 - 2000 words in length written for the journal Health Australia, a journal
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