Problem
1. What are some major disadvantages of the automatic adjustment mechanism under a system of fixed exchange rates?
2. According to the monetary approach, balance in a nation's payments position is restored when the excess supply of money or the excess demand for money has fallen to restore the equilibrium condition: Money supply equals money demand. Explain.
3. What implications does the monetary approach have for domestic economic policies?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.