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View History Bookmarks People Window Help x-OHome l Chegg.com- e Home l Chegg.com × / * Topic: Open Forum #3 G Nigeria floa YouTube *Topic: Open Forum #3 x ×3 Nigeria floa edcc.instructure.com/courses/1 32491 7/discussion-topics/55 397 16#submit Read the article on "Nigeria floats its currency Free at last. Post your reply to these two questions: 1. What are the economic impacts to this country in terms of inflation? 2. What does are the economic advantages of a floating exchange rate vs. a fixed (pegged) rate for this country? Also, you will need to reply to another student's post to receive full credit. NOTE: you must post your reply before reading other student's posts Here is the grading rubric for this forum Discussions Forum Grading Criteria Ratings Pts Post well thought out, Post semi-organized Unorganized post, ncomplete paragraphs, Student's original post to cmplete paragraphs,paragraphs complete, original post to covered al points, covered almost all points, a few minor grammar and covered only a few points, several grammar ptS respond to the contains proper respond to the cOvered al 5 questions asked grammar and spellingspeling errors 5 pts and spelling errors 0 pts 3 pts

Explanation / Answer

Economic impacts to this country in terms of inflation:
1. Increase in black markets over the countries which also lead to increase in corruption
2. Foreign players opting out of the country due to high inflation
3. Shutdown of many organizations
4. Loss of jobs for many due to organizations being shut down and increase in unemployment

A fixed exchange rate policy is one where the government fixes the exchange rate whereas in a floating policy the exchange rate is fixed by market forces of demand and supply. A floating policy is also known as self-correcting policy as the differences in demand and supply will automatically be corrected by the market.
In case of Nigeria, the floating policy will be better because the demand of the currency is low. The floating policy will therefore decrease the value of the currency and in turn bring in more foreign investment, growth of industrial sector, increase the jobs in the country. It will also help to restrict the black markets developed in the country.

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