Question: Comment on this statement: There is no need to worry about having a fiscal deficit, since it can be resolved by asking the central bank

  1. Comment on this statement: There is no need to worry about having a fiscal deficit, since it can be resolved by asking the central bank to print more money.

  2. Describe the economic condition under which the forward exchange rate becomes a downwardly biased predictor of the spot exchange rate to be realized in the future. Explain the governing equilibrium condition.

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