Question

Explain the relative merits of fixed and floating exchange rate regime

Answer 1

Explanation:

A fixed exchange rate denotes a nominal exchange rate that is set firmly by the monetary authority with respect to a foreign currency or a basket of foreign currencies. By contrast,

a floating exchange rate is determined in foreign exchangemarkets depending on demand and supply, and it generally fluctuates constantly.

Answer 2

Answer:

A exchange rate occurs when a country keeps the value of its currency at a certain level against other currency. Often countries join a semi fixed exchange rate where the correct can fulctulate within a small target level.

They leave the monetary and the fiscal authorities of the internal goals.

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