Which type of exchange rate would you expect to see in a highly interventionist economy?

In a highly interventionist economy, you would expect to see a fixed exchange rate. This is because a fixed exchange rate system is characterized by a government or central bank actively maintaining the currency's value at a specific exchange rate relative to another currency or a basket of currencies. This level of control is consistent with interventionist policies, which include active management of the economy by the government, often involving monetary and fiscal measures.

In such economies, authorities may intervene in the foreign exchange market to stabilize the currency, prevent excessive fluctuations, and influence the overall economic conditions. By setting a fixed exchange rate, the government can reduce uncertainty in trade and investment, which can be especially beneficial for an economy that relies heavily on exports or inputs from foreign markets.

In contrast, a floating exchange rate is determined by market forces without direct government or central bank intervention, while a flexible exchange rate allows for some degree of adjustment but still involves some level of monitoring and intervention. Speculative exchange rates refer to values driven by market speculation rather than systematic intervention, which is not typical of a highly interventionist approach. Thus, the characteristics of a fixed exchange rate align closely with the principles and practices of a highly interventionist economy.