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1. Explain why overnight rate and nonborrowed reserves targets are incompatible. 2. Explain the effect of a decrease in the expected future exchange rate on

1. Explain why overnight rate and nonborrowed reserves targets are incompatible.

2. Explain the effect of a decrease in the expected future exchange rate on the equilibrium exchange rate, everything else held constant.

Just need a short 5-6 lines to the point answer for these questions for help with an assignment.

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