Concept Introduction:
Equilibrium in Exchange Market: It is the point where demand for a currency is equal to supply of currency in the exchange market. Under fixed exchange rate government intervention ensures such point.
Fixed Exchange Rate: Exchange rate system under which there is intervention by the government to control the fluctuation is known as fixed exchange rate.
Nominal Exchange Rate: The rate at which currencies are exchanged in the exchange market is known as nominal exchange rate.
Flexible Exchange Rate: Exchange rate system under which there is no intervention by government rather the rate is determined from
Want to see the full answer?
Check out a sample textbook solutionChapter 33 Solutions
Achieve for Economics (1-Term Online)
- Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSONEngineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
- Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage LearningManagerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage LearningManagerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education