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Suppose we have a world of three countries, Home, Foreign 1, and Foreign 2. The exchange rate between the currencies of Foreign 1 and Foreign

Suppose we have a world of three countries, Home, Foreign 1, and Foreign 2. The exchange rate between the currencies of Foreign 1 and Foreign 2 floats. One day your chief economic adviser suggests it would be a good idea to fix your currencys exchange rates against both the Foreign 1 and Foreign 2 currencies. Do you agree with this suggestion? Why or why not? Explain the reasoning in your own words.

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