Question
By modifying tax and import/export rates, among other fiscal policy measures, governments can also impact the economy. The broader economy may be impacted by these
By modifying tax and import/export rates, among other fiscal policy measures, governments can also impact the economy. The broader economy may be impacted by these policies, which may have an effect on the supply and demand for goods.Conversely, central banks find it more challenging to regulate exchange rates. They are set by the foreign exchange market, which is impacted by a variety of variables such as geopolitical developments, market mood, and economic indicators. Although central banks can attempt to stabilize their currency by intervening in the foreign exchange market, their capacity to sustain a particular exchange rate over an extended period of time is restricted.
Exchange rates can be affected by policies that certain governments impose to limit the convertibility of their currencies. Do you think that's fair?
Ref:
https://www.investopedia.com/ask/answers/031115/how-do-central-banks-impact-interest-rates-economy.asp
https://www.imf.org/en/About/Factsheets/Sheets/2023/monetary-policy-and-central-banking
Please provide a brief and comprehensive response with IN-TEXT Citations. Thanks!
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