0
Add your answer:
Earn +20 pts
Advantages of a fixed rate of exchange?
A fixed exchange rate system is one where the value of the exchange rate is fixed to another currency. This means that the government have to intervene in the foreign exchange market to maintain the fixed rate. The equilibrium exchange rate may be either above or below the fixed rate. In Figure 1 below, the equilibrium is above the fixed rate. There is a shortage of the national currency at the fixed rate. This would normally force the equilibrium exchange rate upwards, but the rate is fixed and so cannot be allowed to move. To keep the exchange rate at the fixed rate the government will need to intervene. They will need to sell their own currency from their foreign exchange reserves and buy overseas currencies instead. This has the effect of shifting the supply curve to S2 and as a result, their foreign currency holdings will rise.
Which is more conducive to international trade the fixed or the floating exchange rate?
fixed rate
What is the current money exchange rate in Canada?
exchange rate can$ to SA Rand
How the rate of currency is fixed?
The rate of currency is usually fixed based on the stock exchange.
What is the difference in how the exchange rate reflects the supply and demand for the currency between a flexible-exchange rate system and a fixed-rate exchange system?
Fixed Exhange-Rate System: currency system in which governments try to keep the values of their currencies constant against one another Flexible Exchange- Rate System: allows the exchange rate to be determined by supply and demand. With a flexible exchange- rate system, exchange rates need not fall into any prespecified range.
Advantages of a fixed rate of exchange?
A fixed exchange rate system is one where the value of the exchange rate is fixed to another currency. This means that the government have to intervene in the foreign exchange market to maintain the fixed rate. The equilibrium exchange rate may be either above or below the fixed rate. In Figure 1 below, the equilibrium is above the fixed rate. There is a shortage of the national currency at the fixed rate. This would normally force the equilibrium exchange rate upwards, but the rate is fixed and so cannot be allowed to move. To keep the exchange rate at the fixed rate the government will need to intervene. They will need to sell their own currency from their foreign exchange reserves and buy overseas currencies instead. This has the effect of shifting the supply curve to S2 and as a result, their foreign currency holdings will rise.
Which is more conducive to international trade the fixed or the floating exchange rate?
fixed rate
What is the current money exchange rate in Canada?
exchange rate can$ to SA Rand
How the rate of currency is fixed?
The rate of currency is usually fixed based on the stock exchange.
What is crawling peg in exchange rate system?
Crawling peg is a compromise between fixed & flexible exchange rate.
What is LCD MNF sales?
It is manufacturer sales at a fixed exchange rate to USD (usually the most recent exchange rate).
What is the difference in how the exchange rate reflects the supply and demand for the currency between a flexible-exchange rate system and a fixed-rate exchange system?
Fixed Exhange-Rate System: currency system in which governments try to keep the values of their currencies constant against one another Flexible Exchange- Rate System: allows the exchange rate to be determined by supply and demand. With a flexible exchange- rate system, exchange rates need not fall into any prespecified range.
Does United Arab Emirates have a fixed exchange rate?
Yes, it is fixed against the American Dollar at a rate of 3.76 AED = 1 USD
What is the current country that uses fixed exchange rate?
Latvia
What is a fixed exchange rate?
This is when karen walsh loves taking in the behind
How could one determine the best Euro exchange rate?
There are many online websites that one could use to determine the best Euro exchange rate such as; Scotiabank, Hoovers, Canada Exchange Rate, and Bank of Canada to name a few.
What are fixed exchange rate system and currency board system?
A fixed exchange rate system is where a country's exchange rate regime under which the government or central bank ties the official exchange rate to another country's currency (or the price of gold). The purpose of a fixed exchange rate system is to maintain a country's currency value within a very narrow band. Also known as pegged exchange rate. Fixed rates provide greater certainty for exporters and importers. This also helps the government maintain low inflation, which in the long run should keep interest rates down and stimulate increased trade and investment. however I'm not sure what a currency board system is....sorry.
