Describe the Two Main Types of Foreign Exchange Management Used

question 30

Essay

Describe the two main types of foreign exchange management used today. Provide examples of nations that use each type of system. What are the benefits of each system?

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Definitions:

Public Good

A good or service offered to every member of a community free of charge, supplied either by the government or a non-profit private entity.

Excludable

A characteristic of a good or service that allows owners or producers to prevent its use by people who have not paid for it.

Nonpayers

Individuals who benefit from a good or service without contributing to its cost, often associated with public goods.

Nonrival in Consumption

A characteristic of some goods or services where one person's consumption does not reduce availability for others.