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Question 4 (international trade and foreign exchange): (a) Your economy uses a fixed exchange rate...

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Accounting

Question 4 (international trade and foreign exchange):
(a) Your economy uses a fixed exchange rate system. Describe what is a fixed exchange system.
How does your country try to maintain this pegged rate?
(b) Explain what the trade weighted index is and how it is calculated. Who are the top five trading
partners for Australia and how do they influence the Australian TWI?

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