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Suppose that the exchange rate of HK dollar against British Pounds was in the equilibrium under the floating exchange rate system. If both the interest
Suppose that the exchange rate of HK dollar against British Pounds was in the equilibrium under the floating exchange rate system. If both the interest rate in HK and UK increased by 2% and 5% respectively, how will this affect the exchange rate of HK dollar against British Pounds? Explain this with a diagram of HK dollar
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