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Running head: INTERNATIONAL TRADE1International TradeStudents NameInstitutional AffiliationDate2INTERNATIONAL TRADEInternational Trade5a.A fixed rate of exchange it happens when a given nation holds the value of its currency ata fixed level against currencies of the other nations. Often nations adhere to a semi-fixed rate ofexchange where a currency might fluctuate in a small level; for instance, the Exchange RateMechanism of European was a system of the semi-fixed rate of exchange (Ribeiro, McCombie,& Lima, 2016). Therefore, in this particular case basing on the theoretical framework, a fixedsystem rate of exchange that is similar to the Exchange Rate Mechanism of European shouldinflict monetary regulation, remove indecision, frontier speculation, as well as promote tradealong with investment among member states. On the other hand, the effect on the internationalbusinesses by using such like a system will be positive, and they will have a number of gainssuch as:i.There will no currency fluctuations in the nations that trade with the three nations. Theircurrencies will remain stable and will as well strengthen the economies of their nations sincethere will be a more foreign exchange that will strengthen their home currencies.ii.Another benefit is that, since the currencies of those nations trading with Canada, U.S. andMexico will remain stable, thus the stability always encourages investment. There will be alot of investment experienced ...


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