Which type of exchange rate arrangement is based on supply and demand?
A)soft peg
B)hard peg
C)crawling
D)floating

Question

Quizplus · Accepted Answer

A floating exchange rate arrangement allows the exchange rate to be determined by market supply and demand. Under a floating exchange rate regime, the central bank does not intervene in the foreign exchange market, and the exchange rate is determined purely by market forces.

Which Type of Exchange Rate Arrangement Is Based on Supply