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Does the Signalling Effect of Foreign Exchange Intervention Support or Refute

question 6

Essay

Does the signalling effect of foreign exchange intervention support or refute the claim that assets cannot be perfect substitutes if sterilized intervention is going to have any effect?
Please explain.


Definitions:

Outcome

The result or consequence of a particular process, often used to describe the end result of a chemical reaction.

No Reaction

A condition where no chemical change occurs between reactants under specified circumstances.

Reaction

A process in which one or more substances are changed into others by reorganization of constituent atoms.

Reaction

A chemical change that occurs when substances combine or decompose forming new compounds.

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