A system of managed floating exchange rates is
A)a system in which governments may attempt to moderate exchange rate movements without keeping exchange rates rigidly fixed.
B)a system in which governments use flexible exchange rates.
C)a system in which governments are forbidden from attempt to moderate exchange rate movements without keeping exchange rates rigidly fixed.
D)a system in which governments need to reach a prior agreement among them before they may attempt to moderate exchange rate movements without keeping exchange rates rigidly fixed.
E)a system in which governments use extensive fiscal policy to discourage exchange rate movements.

Question

Quizplus · Accepted Answer

A system of managed floating exchange rates allows for governments to intervene in the foreign exchange market in order to moderate exchange rate movements to some extent. This is in contrast to a system of fixed exchange rates in which governments aim to keep exchange rates rigidly fixed or a system of flexible exchange rates in which exchange rates are determined solely by market forces.

A System of Managed Floating Exchange Rates Is