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1. Define Exchange Rate 2. What determines exchange rates? 3. Discuss the operation of the foreign exchange market and the nature and operation of currency

1. Define Exchange Rate

2. What determines exchange rates?

3. Discuss the operation of the foreign exchange market and the nature and operation of currency arbitrage

4. How would a fall (depreciation ) in the New Zealand dollar affect the New Zealand economy? if the New Zealand dollar were to fall (depreciate ) further, should the Government and the Reserve Bank do anything about it? Justify your answer.

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