IBUS 401 EXAM 2 - BULLINGTON – UOFSC ACTUAL 2025/2026 QUESTIONS AND 100% CORRECT ANSWERS

IBUS 401 EXAM 2 - BULLINGTON – UOFSC ACTUAL 2025/2026 QUESTIONS AND 100% CORRECT ANSWERS What are some advantages and disadvantages of a freely floating exchange rate system versus a fixed exchange rate system? A freely floating system may help correct balance-of-trade deficits since the currency will adjust according to market forces. Also, countries are more insulated from economic problems of foreign countries under a freely floating exchange rate system, because the exchange market acts as a buffer zone between the countries' economies and absorbs the shock from overseas. However, a disadvantage of freely floating exchange rates is that firms are exposed to exchange rate risk and they have to manage it.Need assistance in Online classes, Exams & Assignments? Reach out for Full Course Assistance, Plagiarism-free Essay Writing, Research Paper & Discussion Posts. Confidential & Secure! Email now at: Also, floating rates still can often have a significant adverse impact on a country's unemployment or inflation. What is a fixed exchange rate system Under a fixed exchange rate system, the governments attempted to maintain exchange rates at a constant value or within very narrow boundaries. What is a freely floating exch