answer the home work question as shown

- inherent anti-inflationary nature of fixed prices e However, a fixed rate regime has the following problens: Need for central banks to maintain large quantities of hard currencies and goled to defend the fixed rate -Fixed rates can be maintained at rates that are inconsistent with econonic fun- damentals Terminology associated with exchange rates - When a government oficially declares its own eurrency to worth less or more - When a currency's value is changed in the open cureney market n t directly by government - it is called a depreciation (with a fall in value) or appreciation (with an increase in value). II.3 Homework Discuss Saudi Arabia currency regeme and use the following plot to discuss how the currency exchange rate is managed between 1993 and 2012. Spot USDISAR Exchange Rate (daily basis) 3.77 32% 374 3.73 1.72 331 37 Spot USD/SAR exchange rate from 1993 to 2012 21