Part one of term paper
In a regime of , how might a Central Bank operate its monetary policy and its policy for intervention in foreign exchange markets? Why does it need foreign exchange reserves? The last 20 years have seen an increased international interdependence due to the reduction in the controls on capital flows between countries have been much reduced. ...

Part two of term paper
... such as exchange rate and balance of payment using IS-LM model, have contributed to the rapid development of the open economy models. An exchange rate regime is a description of the conditions under which national government allow exchange rate to be determined. There are three types of exchange rates, fixed, flexible and managed exchange rate. In a fixed exchange rate regime, national governments agree to maintain the convertibility of their currency at a fixed exchange rate. A currenc ...