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In the country of Mordor, people are free to move money into and out of the country without restrictions. The Central Bank of Mordor also

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In the country of Mordor, people are free to move money into and out of the country without restrictions. The Central Bank of Mordor also wants to be able to focus on ghting recessions and ination. not worrying about the exchange rate. Suppose Mordor is at potential output. What could happen that would force the Central Bank of Mordor to let the exchange rate FALL? HINT: Mordor is choosing to let money move in and out of the country. so that means that the exchange rate will want to rise whenever people want to bring money in, and the exchange rate will fall whenever people want to bring money out. Mordor is not going to raise interest rates to stop the exchange rate from rising, and Mordor is not going to lower interest rates to stop the exchange rate from falling. This means that any time the exchange rate of Mordor wants to fall) it will fall. So for this question, youjust need to list four things that could happen that would make Mordor's exchange rate want to FALL. List the four things here: '1 l 2} 3} 4)

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