Principles of Macroeconomics / Unit 13 MAC 1218 short lesson, about 20 seconds
Four Exchange Rate Regimes
Captions available
The idea
Regimes sit on a spectrum. Floating leaves the rate to the market. A soft peg lets it float while the central bank leans against rapid moves. A hard peg fixes it. A merged currency abandons a separate currency entirely.
In practice
Floating is self-regulating and unpredictable; fixing is predictable and demanding.
Where people slip
Some texts group these as three, putting pegs and boards together as fixed.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
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