Currency markets operate under a system of _____ in which the prices of different currencies move up or down based on the demand for and the supply of each currency.
A)countertrade
B)floating exchange rates
C)dumping
D)contract manufacturing

Question

Currency markets operate under a system of _____ in which the prices of different currencies move up or down based on the demand for and the supply of each currency.
A)​countertrade
B)floating exchange rates
C)dumping
D)​contract manufacturing

Quizplus · Accepted Answer

Floating exchange rates refer to a system in which the prices of different currencies are determined by the market forces of supply and demand. In other words, the value of a currency is not fixed to any other currency, and it can fluctuate freely based on factors such as economic conditions, political events, and investor sentiment. This is the most common system used in the currency markets today. Countertrade, dumping, and contract manufacturing are all unrelated concepts.

Currency Markets Operate Under a System of _____ in Which