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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

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What is a currency whose value is determined by the supply and demand for the currency in the market?

Pegged currency ^For me on apex 2022 :)


What best explains what happens when a currency is pegged to the us dollar?

The value of the pegged currency goes up and down depending on the exchange rate of the U.S. dollar. ALSO Pegging a currency to the U.S. dollar gives that currency the same stability as the U.S. dollar, keeping its exchange rate from fluctuating too wildly.


What is benefit and cost of pegged exchange rate?

A pegged exchange rate provides stability in international prices, fostering trade and investment by reducing exchange rate risk. It can also help to anchor inflation expectations in a country. However, the cost includes the potential for misalignment with market values, leading to trade imbalances. Additionally, maintaining the peg requires significant foreign exchange reserves and can limit a country's monetary policy flexibility.


What is the type of currency exchange rate system in which values stay constant?

A currency whose value is fixed either to the value of another currency, or to the value of gold, is called a "pegged currency"


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.

Related Questions

What is a currency whose value is determined by the supply and demand for the currency in the market?

Pegged currency ^For me on apex 2022 :)


What best explains what happens when a currency is pegged to the us dollar?

The value of the pegged currency goes up and down depending on the exchange rate of the U.S. dollar. ALSO Pegging a currency to the U.S. dollar gives that currency the same stability as the U.S. dollar, keeping its exchange rate from fluctuating too wildly.


How much yen is one US dollar at 1969?

In 1969, the exchange rate was approximately 360 Japanese yen to one US dollar. This fixed rate was part of the Bretton Woods system, which pegged currencies to the US dollar. The rate remained stable until Japan moved to a floating exchange rate system in the early 1970s.


What happens when a currency is pegged to the U.S dollar?

The value of the pegged currency goes up and down depending on the exchange rate of the U.S. dollar. Pegging a currency to the U.S. dollar gives that currency the same stability as the U.S. dollar, keeping its exchange rate from fluctuating too wildly.


What is benefit and cost of pegged exchange rate?

A pegged exchange rate provides stability in international prices, fostering trade and investment by reducing exchange rate risk. It can also help to anchor inflation expectations in a country. However, the cost includes the potential for misalignment with market values, leading to trade imbalances. Additionally, maintaining the peg requires significant foreign exchange reserves and can limit a country's monetary policy flexibility.


What is the meaning of parity value in foreign exchange?

In a pegged/fixed exchange rate system the value of currency is fixed in terms of gold or the value of other currency.This value is the parity value of the currency


What has the author Andrea Bubula written?

Andrea Bubula has written: 'Are pegged and intermediate exchange rate regimes more crisis prone?' -- subject(s): Foreign exchange rates, Financial crises


What is the exchange rate of the Danish Krone?

Depends on what currency you want to exchange it to and the rate at that time. The Danish Krone is loosely pegged with the euro, but it fluctuates a bit. You can get an estimate by saying that 1 EUR is roughly 7.5 DKK.


What is free floating mechanism?

A free floating mechanism in finance refers to a system where the value of a currency is determined by market forces such as supply and demand, rather than being fixed by a government or pegged to another currency. This allows the currency to fluctuate freely in response to economic conditions.


What is a pegged skirt?

A pegged skirt tapers towards the bottom - much like pegged jeans have legs that are wider at the thighs but taper to be just wide enough for the foot to get through at the ankle. Pegged skirts may not taper as drastically as pegged trousers and may end up at the knee rather than ankle.


What has the author Stephan W M Schoess written?

Stephan W. M. Schoess has written: 'The effectiveness of monetary policy under the regime of pegged exchange rates'


What type of exchange rate is associated with a higher probability of experiencing a crisis?

While no type of exchange rate system guarantees safety, current research favors the idea that countries that adopt a Pegged Exchange Rate may be more vulnerable to an exchange rate crisis. (pg 273, Gerber) International economics James Gerber