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:

Selective Perception

The process by which individuals selectively interpret what they see or hear on the basis of their interests, background, experience, and attitudes.

Response Characteristic

The specific manner in which an individual responds to stimuli or events, often influenced by personal traits or psychological states.

Unifying Trait

A characteristic or attribute that is considered central to the identity or behavior of an individual, bringing coherence to various aspects of themselves.

Attribution Theory

A concept in psychology that explains how individuals infer the causes of their own and others' behavior.