Floating and fixed exchange-rate systems


Problem: Describe briefly the advantages and disadvantages of i) the floating and ii) the fixed exchange-rate systems. Which do you think the world will move toward in the future?

- China is seen as a fixed-rate regime, and was even an issue in the last Presidential election (see http://www.nytimes.com/2012/10/15/business/global/china-contends-market-sets-value-of-its-currency.html ) China denies manipulating its currency - but it (undeniably) does - how does this help China and hurt the US?

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Finance Basics: Floating and fixed exchange-rate systems
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