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August 2, 2015

Homework Help: Economics

Posted by remy on Tuesday, May 20, 2008 at 10:15am.

I need some help in this question, thanks.

Suppose that a Home country has many trading partners and each
trading partner has its own currency.
(a) If each trading partner allows its currency to float, is it possible for
Home to fix its exchange rate against all of its trading partners?
(b) If Home wishes to reduce the variability of its effective exchange rate, what kind of exchange rate regime might it choose?

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