What is the between Total fixed cost and total variable cost? In the short run factors of production are in the nature of fixed and variable. The total cost of production includes total fixed and total variable factors.
The advantage and disadvantage of Fixed Rate are : Fixed exchange rate protects traders against a lot of uncertainty. Each trader knows what he is to receive or pay in terms of domestic currency but simultaneously it is very difficult to determine an appropriate rate of exchange without trial and error.
Fixed or stable exchange rates ensure certainty about the foreign payments and inspire confidence among the importers and exporters. This helps to promote international trade whereas one of the main disadvantage is that the prices were more flexible. Since all these conditions are absent today, the smooth functioning of the fixed exchange rate system is not possible.