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From course:

Economics A Level (DONEEEEEEE)

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Question:

What are the Advantages of a Fixed Exchange Rate?

Author: eric_galvao



Answer:

-Speculation is Reduced unless there are Fears of a possible Revaluation or Devaluation -Competitive Pressures placed on Firms. They must keep Costs Down, Invest, and Boost Productivity to Be Competitive. Can not Rely on Devaluations -Fixed Exchange Rate brings Stability which can Encourage Investment


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