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Question

1. Exchange rates fluctuate constantly. What is the effect of this on cross-border transactions?

2. Explain the differences between the international monetary system and the global financial system?

3. Discuss the implications of contagion in today's interconnected society. Can you find any examples?

4. Identify and explain the key players in the international monetary and financial systems.

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Exchange rate affects corporations which have contract in foreign currency. If their home country currency falls, but the contract is in foreign currency, the expenses increases. Similarly, if the corporation has to receive payment and the contract sets the payment in foreign currency, if their currency weakens, they will be benefited by cross border 

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