Suppose a nation has a pegged exchange-rate system and you


Suppose a nation has a pegged exchange-rate system and you are the nation's chief central banker. Explain what policy actions you would take to maintain the exchange-rate regime under the following circumstances. There is an increased inflow of short-term (portfolio) capital that you believe is only temporary in nature. There is an increased inflow of long-term (direct investment) capital that you believe will persist for at least a few years.

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Business Economics: Suppose a nation has a pegged exchange-rate system and you
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