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Write a 7 pages paper on the difference between floating and fixed exchange rates and the impacts of each style to a particular country in terms of benefits.
Write a 7 pages paper on the difference between floating and fixed exchange rates and the impacts of each style to a particular country in terms of benefits. The discussion in this paper investigates the difference between floating and fixed exchange rates and the impacts of each style to a particular country in terms of benefits. The study of the guns vs. butter argument and what is meant by a peace dividend in International Relations is found crucial at this juncture to enhance the understanding of international relations. An overview of what sustainable development will also be provided in addition to the relevance of three warning signs of environmental decay that has international consequences.
The value for money for utilization in distinct countries is determined by the exchange rates. The exchange rates entail the utilization of interconversion figures from a value in one country, for ease of use in another country. Two main types of exchange rates are in existence, whose determinants are the usage terms and regulations. The currency amount that is set in advance prior to its reception is often identified as the fixed rate. The exchange rate termed as a floating currency is often dependent on the exchange time and season, hence not fixed. The fixed currency exchange rate is also termed as pegged from in that the government via the central bank sets a particular value and formalizes it for official use, such that no alterations can be made in regards to that currency. On the other hand, the floating rate is also referred to as a self-correcting rate, since its value is dependent on the supply and demand ratios in the private market.
Secondly, a fixed exchange rate creates room for certainty and predictability for those people involved in trade and other business activities. The floating rate has no room for certainty or predictability since the market forces often determine the value for exchange at a particular time or season. The sustainability aspect is also observed when a country has managed to fix its rates of exchange while the aspect is not really considered in the floating exchange since markets demands and supplies can shift at any time depending on the availability of goods and customers. .