7 . Exchange rate systems

Description	Exchange Rate Systems
	Fixed	Freely Floating	Managed Float	Pegged
A system in which exchange rates are held constant
A system in which exchange rates are determined by market forces, rather than government intervention
A system in which exchange rates are allowed to fluctuate, but are subject to government intervention
A system in which the home currency is synchronized with the value of a particular foreign currency

One advantage of a free floating/fixed exchange rate system is that the country with such a system is less affected by inflation in other countries.