For a country that is attempting to maintain a fixed exchange rate, what is the difference between
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For a country that is attempting to maintain a fixed exchange rate, what is the difference between a temporary disequilibrium and a fundamental disequilibrium? Contrast the implications of each type of disequilibrium for official intervention in the foreign exchange market to defend the fixed exchange rate.
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The disequilibrium is the difference between private demand for foreign currency and private supply of foreign currency at the fixed level of the exch...View the full answer
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