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Explain How the Exchange Rate Gets Determined in a Flexible

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Explain how the exchange rate gets determined in a flexible exchange rate system.


Definitions:

Price Earnings Ratios

A valuation metric for stocks, calculated by dividing the current market price of a stock by its earnings per share (EPS).

Growth Models

Economic theories that explain how economic growth occurs in the long-term by focusing on factors like savings, investment, and technological innovation.

Technical Analyst

A professional who evaluates securities by analyzing statistics generated by market activity, such as past prices and volume.

Fundamental Analyst

An individual who evaluates securities by attempting to measure their intrinsic value based on economic and financial factors.

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