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Critically examine the desirability of the world’s major economies introducing a system of fixed exchange rates.

Critically examine the desirability of the world’s major economies introducing a system of fixed exchange rates.

Answers

marlyne
The issue of fixed versus floating exchange rates has been debated by economists and policy makers for many years. For almost three decades after the Second World War the world’s major currencies were fixed in terms of the dollar, which itself, was pegged to a fixed value in gold. This system was known as an adjustable peg as rates could be adjusted in the long run in the event of a structural balance of payments deficit.
Today the Chinese renminbi is fixed against the American dollar, and the members of the Eurozone share a common currency. However, the pound and the American dollar are allowed to float against other major currencies and against each other.
marlinbito answered the question on July 6, 2018 at 09:24

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