With a flexible exchange rate system,government officials have little direct role in the foreign exchange market.

Question

Quizplus · Accepted Answer

In a flexible exchange rate system, government officials do not typically intervene in the foreign exchange market in order to directly influence the exchange rate. Instead, the exchange rate is determined by market forces of supply and demand. However, the government may indirectly influence the exchange rate by implementing policies that affect the economy as a whole, such as changes to interest rates or fiscal policy.

With a Flexible Exchange Rate System,government Officials Have Little Direct