What are the central bank's functions? How is the exchange rate of the country managed? Do you feel this choice of exchange rate management is beneficial to the country's GDP?
What are the central bank's functions? How is the exchange rate of the country managed? Do you feel this choice of exchange rate management is beneficial to the country's
Exchange rate is defined as the price of the currency of one country against another currency. Exchange rates can be of two types in the economy: flexible exchange rate and fixed exchange rate. Under flexible exchange rate the exchange rate is determined by the free market forces of demand and supply. It is a self correcting exchange rate in which any difference in supply and demand is automatically corrected in the market. This is the most common type of exchange rate today. In case of fixed exchange rate, the exchange rate is set by the the government and it is fixed.
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