Flexible or Floating Exchange Rate Regime refers to an exchange rate regime where the demand for and supply of each currency in the foreign exchange market are allowed to determine the exchange rate. This means that the price (exchange rate) of a currency is free to move to the level that equates the quantity demanded of a currency to the quantity supplied. Under this regime, the market for foreign exchange works in the same way as the free market for any other good or service and it is assumed operate under perfect competition conditions applicable to other goods and services in a free market.
Fixed or Pegged Exchange Rate Regime refers to an exchange rate regime where the Central bank must stand ready to absorb any excess demand for and supply of its currency in order to maintain the pegged rate by controlling the outflow of local currency and at the same time try to ensure that all foreign currency inflows pass through its hands.
Zainabdawa answered the question on August 1, 2018 at 08:40
- Explain four reasons why residents of any country demand foreign currency in the foreign exchange market(Solved)
Explain four reasons why residents of any country demand foreign currency in the foreign exchange market
Date posted: August 1, 2018. Answers (1)
- State the theory of covered interest parity(Solved)
State the theory of covered interest parity.
Date posted: August 1, 2018. Answers (1)
- Explain the difference between covered interest arbitrage and uncovered interest arbitrage(Solved)
Explain the difference between covered interest arbitrage and uncovered interest arbitrage.
Date posted: August 1, 2018. Answers (1)
- Describe a full-reserve banking system(Solved)
Describe a full-reserve banking system.
Date posted: July 27, 2018. Answers (1)
- Give a critical view on Fractional-reserve banking(Solved)
Give a critical view on Fractional-reserve banking.
Date posted: July 27, 2018. Answers (1)
- Over the past decade, there has been a trend towards increasing the independence of central banks as a way of improving long-term economic performance. In...(Solved)
Over the past decade, there has been a trend towards increasing the independence of central banks as a way of improving long-term economic performance. In respect to this statement discuss any 4 types of independence of a typical central bank.
Date posted: July 27, 2018. Answers (1)
- The Central Bank has several instruments to use to counter changes in the market and influence price stability. Discuss any 5 of the instruments. (Solved)
The Central Bank has several instruments to use to counter changes in the market and influence price stability. Discuss any 5 of the instruments.
Date posted: July 27, 2018. Answers (1)
- Discuss any five (5) determinants of the changes in interest rates(Solved)
Discuss any five (5) determinants of the changes in interest rates.
Date posted: July 27, 2018. Answers (1)
- Assess the main reasons as to why the government regulate business activities in your country(Solved)
Assess the main reasons as to why the government regulate business activities in your country.
Date posted: July 26, 2018. Answers (1)
- Explain six reasons why developing countries should invest largely in small scale industries rather than in large scale industries(Solved)
Explain six reasons why developing countries should invest largely in small scale industries rather than in large scale industries.
Date posted: July 26, 2018. Answers (1)
- Explain the measures that can be taken to curb the challenges developing countries face in their industrial sectors(Solved)
Explain the measures that can be taken to curb the challenges developing countries face in their industrial sectors.
Date posted: July 26, 2018. Answers (1)
- Examine the key obstacles faced by developing countries in their industrial sectors(Solved)
Examine the key obstacles faced by developing countries in their industrial sectors.
Date posted: July 26, 2018. Answers (1)
- Let us say there is a sudden increase in demand in Kenya for Italian products. Explain how this increase will have an impact on the...(Solved)
Let us say there is a sudden increase in demand in Kenya for Italian products. Explain how this increase will have an impact on the money supply in Kenya's economy
Date posted: July 21, 2018. Answers (1)
- Outline functions of tender committee.
(Solved)
Outline functions of tender committee.
Date posted: July 16, 2018. Answers (1)
- Outline the functions of a Procuring Unit or procurement department in public organization.(Solved)
Outline the functions of a Procuring Unit or procurement department in public organization.
Date posted: July 16, 2018. Answers (1)
- Outline the Roles of the Accounting Officer
(Solved)
Outline the Roles of the Accounting Officer
Date posted: July 16, 2018. Answers (1)
- Outline reasons for the Termination of the Director General(Solved)
Outline reasons for the Termination of the Director General
Date posted: July 16, 2018. Answers (1)
- To what organizations is the PPDA act applicable to?
(Solved)
To what organizations is the PPDA act applicable to?
Date posted: July 16, 2018. Answers (1)
- Discuss Values of Good Procurement Governance
(Solved)
Discuss Values of Good Procurement Governance
Date posted: July 16, 2018. Answers (1)
- Explain the positive impacts of a rapidly growing population(Solved)
Explain the positive impacts of a rapidly growing population.
Date posted: July 16, 2018. Answers (1)