The exchange rate system and the difference between fixed exchange rate and managed float exchange rate.
Explanation of Solution
Exchange rate system:
An exchange rate system explains an agreement between countries on how to determine the exchange rate.
Difference between fixed exchange rate and managed floating exchange rate:
Under fixed exchange rate system, countries agree to keep the exchange rate fixed among their currencies for a long time. Under managed floating exchange rate, the
Concept introduction:
Exchange rate system: An exchange rate system explains an agreement between countries on how to determine the exchange rate.
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Macroeconomics (7th Edition)
- what is volatility in exchange rate ?arrow_forwardWhy is exchange rate important in International Finance? Can we get rid of Exchange rate in International Business ?arrow_forwardWhat is an exchange rate? Why would a government want to maintain a fixed exchange rate? If the U.S. wanted to maintain a fixed exchange rate between the Euro and the Dollar, how would it do so?arrow_forward
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