Political Factors that Impact Exchange Rates (220 words)

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Question

In your own words, distinguish political factors that impact exchange rates (that are not included in established theories of interest rate determination).

Your response should be at least 200 words in length. All sources used, including the textbook, must be referenced; paraphrased and quoted material must have accompanying citations.

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Political factors influence the exchange rate since they affect the demand and supply of the currency. They can be categorized into two aspects – stability of...

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