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"Government Impact on Exchange Rates" Please respond to the
following:
1.) From the first case study, imagine a situation where the Thai
government has decided to peg the Thai Baht to the U.S. dollar.
Predict the major effects that such a peg could have on the
U.S.’s level of inflation and the level of exports or imports to
and from Thailand. Determine the fundamental manner in which
a fixed exchange rate affects companies such as Blades.
2.) From the second case study, analyze the major advantages
and disadvantages associated with a floating exchange rate
system in Thailand. Determine the central manner in which a
floating exchange rate system affects companies such as Blades.
Provide a rationale for your response.
3.) Why do countries peg their currencies to the dollar class?

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Government Impact on Exchange Rates Please respond to the foll

  • 1. "Government Impact on Exchange Rates" Please respond to the following: 1.) From the first case study, imagine a situation where the Thai government has decided to peg the Thai Baht to the U.S. dollar. Predict the major effects that such a peg could have on the U.S.’s level of inflation and the level of exports or imports to and from Thailand. Determine the fundamental manner in which a fixed exchange rate affects companies such as Blades. 2.) From the second case study, analyze the major advantages and disadvantages associated with a floating exchange rate system in Thailand. Determine the central manner in which a floating exchange rate system affects companies such as Blades. Provide a rationale for your response. 3.) Why do countries peg their currencies to the dollar class?