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Question 8 Once capital markets are integrated, it is difficult for a country to maintain a fixed exchange rate. Why? a . Portfolio managers from
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Once capital markets are integrated, it is difficult for a country to maintain a fixed exchange rate. Why?
a Portfolio managers from developed countries will be more conservative in investing in countries with fixed exchange rates.
b The market forces may be stronger than the exchange rate intervention that the government can muster.
c Both a and b are correct.
d None of the above.
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