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What is Understanding Foreign Exchange Mechanisms about?

The document discusses foreign exchange rates and exchange rate systems. It defines foreign exchange, exchange rates, and foreign exchange markets. It then explains flexible/floating exchange rate systems where the rate is determined by market forces of supply and demand. Equilibrium exchange rates can change if demand or supply curves shift due to factors like changes in national income. The document also covers fixed/pegged exchange rate systems where central banks maintain a constant exchange rate throug

Author

Saurav Subedi

Language

EN