Is it possible for a country to run a trade deficit and yet have the value of its currency not change?
Is it possible for a country to run a trade deficit and yet have the value of its currency not change?
Use also supply and demand model of a foreign exchange market to explain how this could occur. Part two: Explain why many industrialized countries do not often intervene in the foreign exchange market.
I hope you can use the two boos as some references.
Cecchetti, S. G (2008). Money, banking and financial markets. McGraw-Hill (Second or Third) International Edition.
Mishkin, F.S. The economics of money, banking and financial markets. Pearson International (Eighth) Edition
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