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Explain the different exchange rates and the advantage and disadvantages
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Explain the different exchange rates and the advantage and disadvantages The floating exchange rate is exchange rate that is determined solely by the market demand and supply for the currency with no government intervention. The currency is left alone so that the supply and demand for that currency allows it to find its own value. In the long run it is the macro economic performance of the economy including trends in competitiveness that drives the value of the currency. The trade flows and capital flows are the main factors affecting the exchange rate. This again comes down to the supply and demand of the particular currency. Supply and demand of a currency is influenced by many factors. The currency of a country is demanded when it is needed to by exports from that particular country. The currency is needed in order to purchase those goods or services. This can change...
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