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A small note on Macroeconomics and its exchange rates –
Macroeconomics is a branch of economics that studies behavior of everything that has an influence in any market as a whole. This subject takes a deal to understand how net profit, if increased and decreased, would have an effect on overall accounts of national capital. To get a clear view of this subject, one needs to clearly understand growth rate of an economy, rate of inflation, total unemployment and performances of trade with other countries. It visibly shows success and failure of governmental policies on economics. And our Exchange Rate Systems Homework Help team explains further with all systems.
Exchange rate systems –
There are four kinds of exchange rate system on which every country has the freedom to choose that suits its policies in a best way. Here they are:
1. Free floating:
Here currency values are determined totally by supply and demand of that currency. Flow of capital and trade has an effect on all exchange rates under this system.
2. Managed floating:
Value of a currency is based on demands in market and currency supply. Some intervention of market currency is taken as simple parts of management of demands that prevail in any market.
Rates are given to some specific targets. Here currency moves within limited fluctuation bands on a day- to- day basis.
4. Fully fixed:
Here rates are hooked and have no fluctuations. Countries’ competitiveness can be raised by cost reductions, as rates will be stable.
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