Fixed exchange rate

Fixed exchange rate is a way to make sure the value of one currency stays the same in relation to another currency. For example, let's say your mommy and daddy take you on a trip to Canada and you want to buy some toys with your U.S. dollars. But the problem is the toy store only accepts Canadian dollars. If the exchange rate is fixed, then you can be sure that you will get the same amount of toys no matter what time you try to exchange your U.S. dollars into Canadian dollars. It is like saying that one dollar is always worth two Canadian dollars, and everyone agrees on this. This is easy to understand and makes it easier to plan things, buy and sell things, and do business in different countries.