Question

short note on
fixed exchange rate system

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Answer 1

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The advantages of a fixed exchange rate include:

Providing greater certainty for importers and exporters, therefore encouraging more international trade and investment. Helping the government maintain low inflation, which can have positive long-term effects such as keeping down interest rates

fixed exchange rate, sometimes called a pegged exchange rate, is a type of exchange rate regime in which a currency's value is fixed against either the value of another single currency, a basket of other currencies, or another measure of value, such as gold.

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Answer 2

Answer:

Fixed exchange rate said to be fixed when it is set and maintained by the government at a particular level. The government may set it at a level higher or lower than the equilibrium exchange rate is determined by the market forces of supply and demand