Pos486 ipe - Study guides, Class notes & Summaries
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Fall 2018: Instructor Schatzman Assignment 2
- Exam (elaborations) • 2 pages • 2021
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1. Given the domestic costs of maintaining a fixed exchange rate, most of the world's largest economies
allow their currencies to float against one another. List two reasons why a government would choose a
fixed exchange rate system rather than a floating exchange rate (1pt)
Provides an exchange rate stability
Can limit rates of inflation with proper monetary controls
Exam (elaborations)
Fall 2018: Instructor Schatzman Assignment 2
Last document update:
ago
1. Given the domestic costs of maintaining a fixed exchange rate, most of the world's largest economies allow their currencies to float against one another. List two reasons why a government would choose a fixed exchange rate system rather than a floating exchange rate (1pt) Provides an exchange rate stability Can limit rates of inflation with proper monetary controls
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