During the time of the gold standard currency was

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During the time of the gold standard, currency was fixed, during the time of Bretton woods the monetary system was on an adjustable peg that was fixed to the US dollar and nowadays most currencies are free floating · Gold standard and Bretton woods provide currency stability and predictability which help facilitate international trade, investment and finance, but they cannot change the currency value when on a fixed exchange rate which a government may want to do during difficult economic times · Economic activities that are domestic favor a floating exchange rate→ What’s the difference between a floating exchange rate and fixed exchange rate??? explains it pretty well, but basically Floating is based off of market forces vs fixed is the gov’ts manipulation of currency · A strong exchange rate allows consumers to buy more of the world’s goods and increase national purchasing power, hurts national producers who have to compete with foreigners in an international market – weak
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