Explore BrainMass

Explore BrainMass

    Currency board & central bank - nominal exchange rate target

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Describe the chief differences between a currency board and a central bank with a nominal exchange rate target.

    © BrainMass Inc. brainmass.com June 3, 2020, 9:21 pm ad1c9bdddf
    https://brainmass.com/business/foreign-exchange-rates/currency-board-central-bank-nominal-exchange-rate-target-178698

    Solution Preview

    First, the central bank controls the money supply by setting the nominal exchange rate target and then adjusting the money supply to achieve that target. Under a currency board system, there is no central bank. The currency board passively responds to the demand for domestic money by buying or selling foreign exchange for ...

    Solution Summary

    This posting provides a detailed answer to the student's question.

    $2.19

    ADVERTISEMENT