Lesson_68_FX intervention and the BoP

Lesson_68_FX intervention and the BoP - FX Intervention and...

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1 Lesson 68 1 FX Intervention and the BoP In our study of the Balance of Payments, we saw that financial account transactions could be classified according to whether they were undertaken by a government’s monetary authority or some other entity The purpose of this lesson is to explain the reason for this distinction and lay the groundwork for analyzing fixed exchange rates Lesson 68 2 Start with demand and supply $ Q E $ FC E = $ D $ S Lesson 68 3 Demand for dollars derived from foreign demand for U.S. goods, services, assets $ Q E $ FC E = $ D $ S
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