Exchange Rate Systems: Fixed versus Free Floating

The video tutorial explores the differences between free floating and fixed exchange rate systems, highlighting their advantages and disadvantages. It explains how free floating rates are determined by market forces, while fixed rates involve central bank intervention. The tutorial discusses China's management of its exchange rate and the role of foreign reserves. It also examines the impact of speculation on fixed exchange rates, using the UK's experience in 1992 as a case study.

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