Nama : Ivandry burhan fairuz

Nim : 042729588

1. The primary goal of central banks is to provide their countries' currencies with price stability by
controlling inflation. What will happen if a country does not have Central bank?

The central bank in a country, in general, is an agency responsible for monetary policy in that
country's territory. The Central Bank seeks to maintain the value of the currency, the banking
sector, and the financial system as a whole.

The central bank is an institution that is responsible for maintaining the price or a currency prevailing
in the country, which in this case is known as inflation or the price in another sense a money.
Therefore, a central bank is needed by every country

things that can happen if a country does not have a central bank:
a. The instability of foreign currency exchange rates in Indonesia.
b. Uncontrollable inflation rate.
c. It is difficult to achieve stability in the prices of goods and services.
d. The risk of carrying out activities related to banking is increasing because there is no supervision.
e. The setting and implementation of chaotic monetary policy.

2. Do you agree that a floating exchange rate adds uncertainty to international trade?
Explain your reason!

Yes, because A floating exchange rate adds uncertainty to international trade. It refers to all the
foreign currency than the domestic currency. It refers to the rate at which one currency is exchanged
with another currency at a rate dependent upon demand. Use for various purposes such as the input
of goods and services.

The floating interest rate or exchange rate is determined by markets. It depends upon the market
demand and supply which adds uncertainty to trade. Fixed exchange rates decide price while
floating exchange rate depends upon the stability of the price of the product. The floating exchange
rates are influenced by depending upon the market rates trading price.