Identify the factors that account for changes in a, Microeconomics

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Identify the factors that account for changes in a

Problem

1. If a currency becomes over valued in the foreign exchange market, what will be the likely impact on the home country's trade balance? What if the home currency becomes undervalued?

2. Identify the factors that account for changes in a currency's value over the long run. 6. What factors underlie changes in a currency's value in the short run?

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