Do the same as in Problem 4 but assuming an implicit appreciating trend of the dollar over
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Problem 4
Draw a figure similar to Figure 20.2 showing the fluctuation in the exchange rate over the business cycle without speculation, with stabilizing speculation, and with destabilizing speculation when there is no long-run trend in the exchange rate over the cycle. Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...
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