Fixed and Floating Exchange
Not what you're looking for?
Discuss the relative merits of a fixed and a floating exchange rate. From an international business perspective, which criteria is the most important relative to a choice between systems and why?
Purchase this Solution
Solution Summary
This is a discussion of the relative merits of a fixed and a floating exchange rate from an international business perspective, and which criteria is the most important relative to a choice between systems and why.
Solution Preview
Discuss the relative merits of a fixed and a floating exchange rate. From an international business perspective, which criteria is the most important relative to a choice between systems and why?
A fixed exchange rate system is about maintaining monetary discipline, stopping or at least limiting speculation and thereby uncertainty. A fixed exchange rate system operates on the premise that there is no close connection between the trade balance and exchange rates. Maintaining monetary discipline means governments must maintain a fixed exchange rate parity that ensures countries do not expand their money supplies which can cause inflation. A fixed exchange rate system attempts to stop the possibility of speculation which can cause fluctuations and volatility in exchange rates and therefore increase uncertainty in the economy of a given country. A fixed rate exchange rate system does not use trade balance adjustments because it maintains that there is no close link ...
Purchase this Solution
Free BrainMass Quizzes
Balance Sheet
The Fundamental Classified Balance Sheet. What to know to make it easy.
Six Sigma for Process Improvement
A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.
Learning Lean
This quiz will help you understand the basic concepts of Lean.
SWOT
This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.
Transformational Leadership
This quiz covers the topic of transformational leadership. Specifically, this quiz covers the theories proposed by James MacGregor Burns and Bernard Bass. Students familiar with transformational leadership should easily be able to answer the questions detailed below.