Finance

Why are pegged exchange rates often overvalued and difficult to govern

Why are pegged exchange rates often overvalued and difficult to governments to maintain? What will be an ideal response?     ANSWER Answer: Governments that maintain a pegged exchange rate often find the position difficult to maintain. Too often, the exchange rate overvalues the local currency on the foreign exchange markets. This situation produces a […]

Read full post

Date: September 19th, 2020

For a fixed exchange rate system to work successfully, the government

For a fixed exchange rate system to work successfully, the government that oversees its operations must be able to make tight budget and monetary policies prevail from the beginning. Agree or disagree and explain why. What will be an ideal response?     ANSWER Answer: Under a fixed exchange rate system, there is a strong […]

Read full post

Date: September 19th, 2020