Read the following scenario and explain which exchange rate system is best suited and explain your rationale of why the exchange rate system you chose is the most appropriate for the situation.
The small country of San Pon in China participates in exchange rate activities. The country they anticipate exchanging with has a struggling economy and jobs are scarce. The currency has lost a significant amount of value, but the country is in need of the currency exchange. The exchange rates have fluctuated quickly over the past six months and the government has become involved on several occurrences and altered the value of the currency more. Under what exchange rate system should San Pon exchange with another country and why or why not?
