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Q: How did the forces of supply and demand determine flexible exchange rates?
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List and explain advantages of flexible exchange rate regime?

Automatic adjustment: Flexible exchange rates allow currencies to fluctuate based on market forces, enabling automatic adjustment to changes in supply and demand without the need for government intervention. Insulation from external shocks: Countries with flexible exchange rates are better able to insulate themselves from external shocks, such as changes in global economic conditions or commodity prices, as their currency can depreciate or appreciate to rebalance the economy. Independent monetary policy: A flexible exchange rate regime gives countries greater freedom in conducting their own monetary policy, as they are not constrained by the need to maintain a fixed exchange rate. Overall, a flexible exchange rate regime provides countries with the ability to adapt to changing economic conditions, maintain independence in their policy choices, and enhance economic resilience.


If the supply and demand for currency determines the exchange rates this is called?

floating


What is a floated exchange rate?

Simply put, it is an exchange rate system that allows market forces of demand and supply to regulate the economy's exchange rate, rather than allowing central authorities of a country fix it.


Why do you need currency exchange?

Foreign Currency rates fluctuate based on the market forces of demand and supply. This means the rates can change at any given moment. We need a foreign exchange market to determine a value for each foreign currency and this would make it easier to exchange different currencies for one another.


What is labor market?

A labour market exists when the forces of supply (potential employees looking for work) and the forces of demand (potential employers looking for workers) are brought in contact in an exchange (labour for wages).


What are market forces?

Supply, demand, capital, labor--laws. Tariffs and taxes have an effect on the economy, too.


Is flexible and rigid a force?

No, flexible and rigid are not forces. They describe the ability of an object to bend or deform (flexible) or to resist bending or deformation (rigid). Examples of forces include gravity, friction, and tension.


Who decides the value of rupee in terms of dollar?

The demand and supply forces in the currency markets determine the rate of the rupee to the dollar. The currency is not fixed by a central bank.


How Excess demand and excess supply eliminated by market forces?

Excess demand is easily eliminated by market forces. If either the price or the supply goes up, demand will decrease exponentially.


What are valence forces?

Valence forces refer to the attractive and repulsive forces that act between atoms to form chemical bonds. These forces include ionic, covalent, and metallic bonding interactions that help hold atoms together in molecules or crystal structures. Valence forces determine the physical and chemical properties of substances.


What are two common market forces?

Two common market forces are supply and demand.


In a planned economy of the following does the job of market forces in order to determine the outcomes?

In a planned economy, the government does the job of market forces in order to determine the outcomes.