Question: Some fast-growing poorer countries face a conflict between wanting to maintain a fixed exchange rate with a rich country and wanting to keep inflation low.

Some fast-growing poorer countries face a conflict between wanting to maintain a fixed exchange rate with a rich country and wanting to keep inflation low. Explain the logic behind this statement. Use the examples of Slovakia and China to illustrate your argument.

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Fastgrowing countries experience increases in productivity that appreciate their real exchange rates ... View full answer

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