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The question is a True/False. The first question is the most important; I'm having a hard time understanding it at this moment. If foreign countries

The question is a True/False. The first question is the most important; I'm having a hard time understanding it at this moment.

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If foreign countries are increasing their demand for domestic financial assets, then we can expect the domestic currency to appreciate and the current account balance to decrease, all other things equal. A country with a flexible exchange rate regime reduces a country's bias toward inflationary policies

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