ECON MACRO (with MindTap Printed Access Card) (New, Engaging Titles from 4LTR Press)
6th Edition
ISBN: 9781337408738
Author: William A. McEachern
Publisher: Cengage Learning
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Question
Chapter 18, Problem 7P
To determine
To Determine: the concept of managed float and the disadvantages of freely floating exchange rates that forced the countries to adopt the managed float system.
Concept Introduction:
Managed float or dirty float is the current financial environment in which exchange rates changes from day to day and central bank attempt to influence their countries exchange rates by selling or buying currency.
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Chapter 18 Solutions
ECON MACRO (with MindTap Printed Access Card) (New, Engaging Titles from 4LTR Press)
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Similar questions
- Compare and contrast the fixed, freely floating, and managed float exchange rate systems. What are some advantages and disadvantages of a freely floating exchange rate system versus a fixed exchange rate system?arrow_forwardWhy do exchange rates matter to companies, especially those involved with the foreign direct investment?arrow_forwardWhat effect does a high exchange rate have on imports, exports, and that country's production?arrow_forward
- Why is exchange rate important in International Finance? Can we get rid of Exchange rate in International Business ?arrow_forwardVariations in the foreign exchange rate can impact on the profitability of business. Explain what determines the foreign currency exchange rates.arrow_forwardWhat are foreign exchange markets? Why does the State Bank of Vietnam intervene in the foreign exchange market, and give examples?arrow_forward
- Please provide step-by-step answers with an explanationarrow_forwardA country would always prefer to have a floating exchange rate regime in operation . Discuss .Answer:arrow_forwardVisit one of the many websites that lists all of the current exchange rates between different currencies around the world. Try a financial newspaper’s site such as ft.com (follow the links to “Market Data,” and then “Currencies”), or try websites devoted to foreign exchange market data such as oanda.com or xe.com (dig down; don’t just look at the major currency tables). According to these lists, how many distinct currencies exist around the world today? Are some currencies used in more than one country?arrow_forward
- Critically discuss some of the factors affecting the performance of currencies in emerging markets and the impact on theireconomies.arrow_forwardWhat are some of the reasons central banks and treasuries enter the foreign exchange markets, and in what important ways are they different from other foreign exchange participants?arrow_forwardHow can foreign exchange rates impact a business positively? How can foreign exchange rates have a negative impact on a business? In regards to a global insurance company, how can exchange rates affect the day to day running of their business?arrow_forward
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