--%>

Maintaining the fixed exchange rate

Explain why “Once  the capital markets are integrated, it becomes difficult for the country in order to maintain the fixed exchange rate”. 

E

Expert

Verified

Once the capital markets are internationally integrated, large amount of money can flow in and out of the country within the short time period. This can make it really difficult for country to maintain the fixed exchange rate.

   Related Questions in Financial Accounting

  • Q : Modigliani-Miller equation In

    In Modigliani-Miller equation, why is market value of the levered firm is more than the market value of an equivalent unlevered firm?

  • Q : Equilibrium of balance of payments

    State mechanism that restores equilibrium of balance of payments in case it gets disturbed below the gold standard.

  • Q : Explain Due Diligence Due Diligence: 1.

    Due Diligence:1. General: Assess of prudence, accountability, and diligence which is expected from, and ordinarily exercised by, a reasonable and prudent person beneath the situations.

  • Q : Security returns Security returns are

    Security returns are found to be less correlated across various countries rather than within the country. Explain Why?

  • Q : Define Liabilities Liabilities mean the

    Liabilities mean the amount which the firm owes to the outsiders. Liabilities are of two types: -Long term liabilities & Short term liabilities. Examples of long term liabilities are long terms loans, bonds etc. & examples of short term liabil

  • Q : Measures to avoid financial crisis In

    In integrated world financial market, financial crisis in country is rapidly transmitted to the other countries, resulting in the global crisis. State some of the measures would you propose in order to avoid the recurrence of the Asia-type crisis.

  • Q : Please help me he following information

    he following information is taken from the financial statements of an entity: 20x4 20x3 Property, plant and equipment $4,600,000 $4,200,000 Accumulated depreciation (1,800,000) (1,350,000) Depreciation expense 560,000 Gain on disposal of PPE 65,000 The asset disposed of had a cost

  • Q : Development phases of Friendship There

    There are six developmental phases of how friendships develop. Identify each phase in sequence and discuss the characteristics of each phase by using real or hypothetical example to illustrate this developmental path.

  • Q : World beta concept of a security

    Explain the world beta concept of a security.

  • Q : Corruption of Creativity Explain the

    Explain the Corruption of Creativity in Creative Industry ? Explain in brief.