Assume the prevailing exchange
rate in a fixed exchange rate regime is fixed above equilibrium (undervalued). Explain the steps the central bank of the
country is taking to make this a possible scenario.
the central bank fixes the exchange rates above the equilibrium, in order to regulate the stability of the currency according to the ration to which it is pegged.it also prevents the government from using monetary policies inorder to achieve monetary stability
May 4th, 2015
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