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Explain and discuss why Singapore as a more advanced but also small, trade-dependent economy, prefers a flexible floating exchange rate system rather than a fixed exchange rate system, given the respective pros and cons of flexible and fixed exchange rates in theory

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Singapore is a tourism based economy which comes into developed country it prefers a floating exchange rate because floating exchange rate is determine on the demand and supply of a particular country currency and laws of marketing mechanisms applies to it, thus it determine the capital investment from different nation based on the structure of the economy and not on authority guideliness. Under fixed exchange rate a currency foreign reserves falls down or increase because it is not based on law of demandand supply and harms an economy.

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