Suppose that you are an advisor to the Central Bank of the small open economy of Hyperborea, which has been experiencing an average inflation rate of 80% (on an annual basis). The country is considering adopting a fixed exchange rate (e.g., to peg its exchange rate against the US dollar). You are asked to write a brief for the Governor of the central bank summarizing the potential benefits and of a fixed exchange rate regime against floating exchange rates. Write such a brief report commenting on fiscal discipline, seigniorage, and expected future inflation