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What is the difference in how the exchange rate reflects the supply and demand for the currency between a flexible-exchange rate system and a fixed-rate exchange system?
Fixed Exhange-Rate System: currency system in which governments try to keep the values of their currencies constant against one another Flexible Exchange- Rate System: allows the exchange rate to be determined by supply and demand. With a flexible exchange- rate system, exchange rates need not fall into any prespecified range.
Advantages of a fixed rate of exchange?
A fixed exchange rate system is one where the value of the exchange rate is fixed to another currency. This means that the government have to intervene in the foreign exchange market to maintain the fixed rate. The equilibrium exchange rate may be either above or below the fixed rate. In Figure 1 below, the equilibrium is above the fixed rate. There is a shortage of the national currency at the fixed rate. This would normally force the equilibrium exchange rate upwards, but the rate is fixed and so cannot be allowed to move. To keep the exchange rate at the fixed rate the government will need to intervene. They will need to sell their own currency from their foreign exchange reserves and buy overseas currencies instead. This has the effect of shifting the supply curve to S2 and as a result, their foreign currency holdings will rise.
What are fixed exchange rate system and currency board system?
A fixed exchange rate system is where a country's exchange rate regime under which the government or central bank ties the official exchange rate to another country's currency (or the price of gold). The purpose of a fixed exchange rate system is to maintain a country's currency value within a very narrow band. Also known as pegged exchange rate. Fixed rates provide greater certainty for exporters and importers. This also helps the government maintain low inflation, which in the long run should keep interest rates down and stimulate increased trade and investment. however I'm not sure what a currency board system is....sorry.
Does Canada have a fixed exchange rate?
No.
Which is more conducive to international trade the fixed or the floating exchange rate?
fixed rate
What is the current exchange rate for the stock market?
Current exchange rate for the stock market is different for every country. Encyclopedia should have a lot more information on the exchange rate from countries to countries.
What is the difference in how the exchange rate reflects the supply and demand for the currency between a flexible-exchange rate system and a fixed-rate exchange system?
Fixed Exhange-Rate System: currency system in which governments try to keep the values of their currencies constant against one another Flexible Exchange- Rate System: allows the exchange rate to be determined by supply and demand. With a flexible exchange- rate system, exchange rates need not fall into any prespecified range.
What is the foreign exchange rate in the US?
The US foreign exchange rate varies greatly depending on the country and currency. The current foreign exchange rate for euros is 0.77 euros per USD. The current foreign exchange rate for CAD is 1.02 CAD per USD.
Advantages of a fixed rate of exchange?
A fixed exchange rate system is one where the value of the exchange rate is fixed to another currency. This means that the government have to intervene in the foreign exchange market to maintain the fixed rate. The equilibrium exchange rate may be either above or below the fixed rate. In Figure 1 below, the equilibrium is above the fixed rate. There is a shortage of the national currency at the fixed rate. This would normally force the equilibrium exchange rate upwards, but the rate is fixed and so cannot be allowed to move. To keep the exchange rate at the fixed rate the government will need to intervene. They will need to sell their own currency from their foreign exchange reserves and buy overseas currencies instead. This has the effect of shifting the supply curve to S2 and as a result, their foreign currency holdings will rise.
What are fixed exchange rate system and currency board system?
A fixed exchange rate system is where a country's exchange rate regime under which the government or central bank ties the official exchange rate to another country's currency (or the price of gold). The purpose of a fixed exchange rate system is to maintain a country's currency value within a very narrow band. Also known as pegged exchange rate. Fixed rates provide greater certainty for exporters and importers. This also helps the government maintain low inflation, which in the long run should keep interest rates down and stimulate increased trade and investment. however I'm not sure what a currency board system is....sorry.
How a government can maintain fixed exchange rate?
If a government were to fix an exchange rate and stick to it, it could mean total economic failure for a country. Having the exchange rate fluctuate somewhat gives a chance for economic growth.
Does Canada have a fixed exchange rate?
No.
Which is more conducive to international trade the fixed or the floating exchange rate?
fixed rate
How a country Maintains a fixed exchange rate?
A country maintains a fixed exchange rate through a balance supply and demand of money(monetary terms) in a particular country. A domestic currency can compete with an international currency by just utilizing it for the importation of an intermediate goods (raw materials) in order to minimize the value. In return, the exportation of a final goods may lead to a higher cost and the domestis market will have a stable exchange rate
What country has the currency NZD?
New Zealand is the country that has the currency NZD. The current exchange rate is 1 New Zealand Dollar is equal to 86 US cents. The exchange rate seems to be on the rise.
What is the current money exchange rate in Canada?
exchange rate can$ to SA Rand
What is the current exchange rate for usd eur?
According to one exchange rate site, the current exchange rate for USD to EUR is 1 USD :1.4385 EUR. This information is current as of August 19, 2011.
