Question

Anticipating the outcome of a peg, economists believe the stable condition is a situation in which combinations of investor beliefs and government actions coincide. Such a condition is called_______________.

Answer 1

Answer:

Exchange rate harmony

Explanation:

An exchange rate can be defined as the value of a nation's currency in terms of the currency of a different economic zone. Exchange rate harmony can be described as a relatively stable exchange rate that is experienced between countries.

Factors that could affect exchange rate in an economy include:

(1) High interest rates

(2) Trade balance

(3) Political stability of the country

(4) Presence of internal harmony

(5) High degree of transparency in government administrations

(6) General well being of the economy