MindTap Economics, 1 Term (6 Months) Printed Access Card for Mceachern's ECON MACRO, 6th
6th Edition
ISBN: 9781337915595
Author: William A. McEachern
Publisher: Cengage Learning
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Question
Chapter 18, Problem 7P
To determine
To Determine: the concept of managed float and the disadvantages of freely floating exchange rates that forced the countries to adopt the managed float system.
Concept Introduction:
Managed float or dirty float is the current financial environment in which exchange rates changes from day to day and central bank attempt to influence their countries exchange rates by selling or buying currency.
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What is the difference between independent floating, managed floating, and fixed exchange rate systems?
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Compare and contrast the fixed, freely floating, and managed float exchange rate systems. What are some advantages and disadvantages of a freely floating exchange rate system versus a fixed exchange rate system?
Chapter 18 Solutions
MindTap Economics, 1 Term (6 Months) Printed Access Card for Mceachern's ECON MACRO, 6th
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- Why do exchange rates matter to companies, especially those involved with the foreign direct investment?arrow_forwardWhat effect does a high exchange rate have on imports, exports, and that country's production?arrow_forwardWhy did countries like the Philippines abandon the adjustable peg system and replaced it with themanaged floating exchange rate system? Why is this system sometimes referred to as “dirty float”?arrow_forward
- What factors underlie a nation’s decision to adopt floating exchange rates or fixed exchange rates?arrow_forwardWhy is exchange rate important in International Finance? Can we get rid of Exchange rate in International Business ?arrow_forwardA country would always prefer to have a floating exchange rate regime in operation . Discuss .Answer:arrow_forward
- Variations in the foreign exchange rate can impact on the profitability of business. Explain what determines the foreign currency exchange rates.arrow_forwardWhat are foreign exchange markets? Why does the State Bank of Vietnam intervene in the foreign exchange market, and give examples?arrow_forward
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