Question: what are the advantages and disadvantages of a fixed exchange rate?
Answer: (i) Elimination of Uncertainty and Risk:
(ii) Speculation Deterred:
(iii) Prevention of Depreciation of Currency:
(iv) Adoption of Responsible Macroeconomic Policies:
(v) Attraction of Foreign Investment:
(vi) Anti-inflationary:
(i) Speculation Encouraged:
(ii) Adequacy of Foreign Exchange Reserves: