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C.Assume a country's exchange rate starts off in a PPP equilibrium position, E. Then a loss of foreign confidence triggers massive capital outflows, leading to
C.Assume a country's exchange rate starts off in a PPP equilibrium position, E. Then a loss of foreign confidence triggers massive capital outflows, leading to a sharp drop in its exchange rate significantly below E. Also assume there is free flow of capital. Trace the adjustment dynamics for the exchange rate to move back to its PPP equilibrium over time
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The Business of Tourism Management
Authors: John Beech, Simon Chadwick
1st edition
273688013, 273688014, 9781405871631 , 978-0273688013
