Business Finance Homework Help

A global debate centers around the subject of fixed foreign exchange rates and the question of whether returning to the gold standard is a good idea.

It appears that we have gone from the thing we valued, gold as a currency, to a currency that operated as a proxy for gold, to currencies that float against one another in a largely free float, hinged not to gold but to our faith in the monetary system.

1.  If the Special Drawing Rights (SDR) were used, would a viable fixed-rate regime be possible or not?

2.  Given the inclusion of the SDR, outline the pro and con arguments for a fixed-rate regime.