Question

State the advantages and disadvantages of floating and fixed dome type plant.

Answer 1

The advantage of fixed exchange rates providing greater certainty for importar and exporter ,therefore increasing most traditional trade and investment helping the government maintain low inflation which can have positive long term effect such a keeping down interest rates.
floating exchange rate also have disadvantage higher volatility floating exchange rates are highly volatile if the country is already experiencing economic problem such as high inflation aur unemployment. floating exchange rates make the situation worse.
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