Why is it important to understand fixed exchange rates in the modern global economy?
What will be an ideal response?
Fixed rates continue to be important for four reasons:
1. Managed floating: Central banks intervene in foreign exchange markets.
2. Regional currency arrangements: Some countries peg their currency to another currency.
3. Developing countries and countries in transition: These countries often attempt to peg their currency to another currency.
4. Lessons of the past: Fixed exchange rates could have a resurgence.
You might also like to view...
Describe the supply curve in a monopoly market
What will be an ideal response?
For a perfectly competitive firm, the value of the marginal product of labor falls as more workers are hired because of the diminishing
A) output price. B) marginal physical product of labor. C) price of labor. D) marginal cost of production.