Question

government use a multiple exchange rate system to​

Answer 1

Answer:

A dual exchange system can be used to lessen pressure on foreign reserves during an economic shock that results in capital flight by investors. The hope would be that such a system can also alleviate inflationary pressures and enable governments to control foreign currency transactions.

Explanation:

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Answer 2

The multiple exchange rates can be used selectively to keep export prices at a higher level, while keeping import prices at a relatively lower level. In this way, a country practicing multiple exchange rates, can secure better or more favourable terms of trade.

Explanation:

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