Chris_Smith_Week_5

Chris_Smith_Week_5 - Chris Smith Business Economics GM545...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Chris Smith Business Economics GM545 March10 Session Kristnoplis@aol.com
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Chapter 26 # 8 A fixed exchange rate is determined by the government. The government sets the rate of their currency and makes economic decisions and policy to keep the currency at a stable rate. This usually requires the development of a central bank that makes monetary decisions. “If, for example, it is determined that the value of a single unit of local currency is equal to US$3, the central bank will have to ensure that it can supply the market with those dollars.” ( http://www.investopedia.com/articles/03/020603.asp ) In a flexible exchange rate the currency rate will determine the exchange rate. (Core Economics, 2008) These are usually determined by the free market and are considered “self correcting”. ( http://www.investopedia.com/articles/03/020603.asp ) From the looks of things there are no true fixed or true floating exchange rates. The International Monetary Fund would be the overseeing of the floating exchange rate while the Federal Reserve in the United States would be the overseer of the “fixed” rate.
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 4

Chris_Smith_Week_5 - Chris Smith Business Economics GM545...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online