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International adjustment process
1. Any mechanism for change in international markets. 2. The mechanism by which payments imbalances diminish under pegged exchange rates and nonsterilization. Similar to the specie flow mechanism, exchange-market intervention causes money supplies of surplus countries to expand and vice versa, leading to price and interest rate changes that correct the current and capital account imbalances.
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- Part of Speech: noun
- Synonym(s):
- Blossary:
- Industry/Domain: Economy
- Category: International economics
- Company: University of Michigan
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