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The price of a floating currency is determined by the currency exchange market while the price of a fixed currency is connected to the price of some other commodity.

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What of the following best explains the difference between a fixed currency and a floating currency?

A fixed currency is pegged to another major currency or a basket of currencies, maintaining a stable exchange rate, which helps to provide predictability in international trade. In contrast, a floating currency's value fluctuates based on market forces, such as supply and demand, leading to more volatility in exchange rates. This flexibility can allow for automatic adjustments to economic conditions but can also lead to uncertainty in international transactions. Ultimately, the choice between fixed and floating systems reflects a country's economic priorities and stability.


What is the difference between a fixed currency and a floating currency?

A fixed currency is used in countries where the value of the money is closely tied to the value of gold, or the value of another country's currency. A floating currency is one that changes depending on the state of the market, i. e. supply and demand.


Which best explains the difference between a fixed currency and floating currency?

A fixed currency is pegged to another major currency or a basket of currencies, with its value maintained by the government or central bank, which intervenes in the foreign exchange market to stabilize it. In contrast, a floating currency's value is determined by market forces, such as supply and demand, without direct government intervention. This means that fixed currencies can provide stability but may restrict monetary policy flexibility, while floating currencies allow for automatic adjustments to economic conditions but can lead to volatility.


What is the difference between a floating and a pegged exchange rate?

pegged exchange rate is officially fixed in terms of gold or any other currency in foreign exchange. Floating exchange rate is flexible rate in which value of currency is allowed to adjust freely determined by the supply & demand of foreign exchange


Difference between a floating charge and a fixed charge?

fixed and floating charge


What is the difference between currency future and currency option?

The difference between a currency future and a currency option is the option is the amount paid is all that is at risk and with future you could lose a lot more.


What is the difference between market and floating market?

a floating market floats but an market dont float


What is the Difference between a normal paper and currency paper?

the main difference between currency paper and normal paper is that the currency paper is made up of cotton fibres and the normal paper is obtainde from trees


What is the difference between currency paper and a normal paper?

the main difference between currency paper and normal paper is that the currency paper is made up of cotton fibres and the normal paper is obtainde from trees


Is what is the difference between pound and dollar?

Pounds is the currency of England and dollars is the currency of America


What is the difference between an inline object and a floating object?

A floating object can be moved independently of the surrounding text characters.


What is the difference between an floating object and a inline object?

A floating object can be moved independently of the surrounding text characters.