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(a) Was the depreciation of the Asian currencies during the Asian crisis due to trade flows or capital flows? (b) Why do you think the degree of movement over a short period may depend on whether the reason is trade flows or capital flows?

Respuesta :

Manetho

Explanation:

a) It was due to capital flow.

b)Because of exchange of currencies that takes place between Asia and outside. This lead to decpreciation of Asian currencies and a lot of capital outflow. Unlike capital flow, trade flow does not happen over a short period of time it happens over a large period of time.

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