Please enable JavaScript.

Coggle requires JavaScript to display documents.

Exchange Rates (Types (Floating (A floating currency is a currency for…

- - - - Export lead economy
      - Low unemplyment
      - FDI
      - GDP boost
      - Better BOP
    - - Expensive imports
      - Increased Inflation
      - Hard to pay for deficits
  - - - Cheap imports
      - Reduces Inflation
      - Easier to pay off trade and budget deficits
    - - Exports become more expensive
      - Slower GDP growth
      - Higher Unemployment
- - - - No speculations
      - Constant value for one economy
      - Export led economy with 1 main partner
      - Stability
      - No swings in exchange rate
    - - No monetary policy with devaluating ex. rate
      - Expensive to maintain
  - - - Self correcting
      - protection from external events
      - Freedom to choose domestic policy
    - - high volatility
      - can make existing problems worse
      - low confidence