Question

In which situation is a country most likely to choose a fixed exchange rate for its currency

Answer 1

Probably the best reason to adopt a fixed exchange rate system is to commit to a loss in monetary autonomy. This is necessary whenever a central bank has been independently unable to maintain prudent monetary policy, leading to a reasonably low inflation rate.

Answer 2

most likely the best motivation to embrace a proper conversion scale framework is to focus on a misfortune in money related independence. This is fundamental at whatever point a national bank has been freely unfit to keep up with judicious money related strategy, prompting a sensibly low expansion rate.