Describe the Difference Between Fundamental Analysis and Technical Analysis in Forecasting

question 25

Essay

Describe the difference between fundamental analysis and technical analysis in forecasting exchange rate movements.

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Definitions:

Firms

Entities that produce goods or provide services, typically with the aim of making a profit.

Monetary Policy

The actions of a central bank, currency board or other regulatory authorities that determine the size and rate of growth of the money supply, which in turn affects interest rates.

Circular-Flow Diagram

A visual model showing the interactions between households and firms in an economy, illustrating the flows of goods and services and factors of production in markets.

Factors Of Production

The resources including labor, land, capital, and entrepreneurship, that are used in the production of goods and services.