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help out with these. Thank you. 8 Devaluation and credibility Consider an_open economy with a fixed exchange rate, E. Supgose that, initially, financial market part1c1pants

help out with these. Thank you.

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8 Devaluation and credibility Consider an_open economy with a fixed exchange rate, E. Supgose that, initially, financial market part1c1pants believe that the government is comrnltte to maintaining the fixed exchange rate. Let UIP stand for the uncovered interest parity condition. Now suppose that the central bank announces a devaluation. The exchange rate will remain fixed, but at a new level, E', such that E'

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