Explain How Exchange Rates Are Determined in a Fixed Exchange

question 144

Essay

Explain how exchange rates are determined in a fixed exchange rate system. Discuss the advantages and disadvantages of a fixed exchange rate system.

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Definitions:

Gasoline

A liquid fuel made from petroleum and used primarily as fuel in internal combustion engines.

Chemical Weathering

The breakdown of rocks and minerals through chemical reactions with atmospheric agents such as oxygen, water, and acids, leading to the formation of new minerals and soil.

Physical Weathering

The breakdown of rocks and minerals into smaller pieces by physical forces without chemical alteration.

Soil Formation

The process by which rocks break down and decompose over time to form soil, influenced by factors like climate, organisms, topography, and time.