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    Principles of Macroeconomics Study Set 7
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    Exam 11: Exchange Rates and the Balance of Payments
  5. Question
    Explain Why a Central Bank Cannot Defend a Fixed Exchange
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Explain Why a Central Bank Cannot Defend a Fixed Exchange

Question 42

Question 42

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Explain why a central bank cannot defend a fixed exchange rate indefinitely.

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A central bank buys and sells foreign cu...

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