Under the fixed exchange rate system, the monetary authorities will eliminate the gap between supply and demand in the foreign exchange market by adjusting the foreign exchange reserves at a fixed exchange rate level, and accordingly adjust the economic imbalance through changes in the money supply.

When the international competitiveness of domestic products declines, under the fixed exchange rate system, it is adjusted by the change of money supply and then the change of domestic price level, and the change of price level will also cause the change of national income. For example, the decline in the international competitiveness of domestic products is due to the high cost caused by the slow improvement of labor productivity in the departments that produce export products. Under the fixed exchange rate system, relevant industrial departments are forced to take the initiative to reduce costs and improve the technical level. )

The floating exchange rate system is completely regulated by exchange rate changes. (Under the above circumstances, the devaluation of the local currency under the floating exchange rate system can increase exports in the short term, but it is not conducive to the competitiveness of domestic products in the long run. )