An exchange rate system in which governments and central banks do not participate in the Jcurrency market is a(n)

Question

Quizplus · Accepted Answer

In a free-floating exchange rate system, governments and central banks do not intervene in the currency market to manipulate the value of their currency. The exchange rate is determined by the forces of supply and demand in the market. This system allows for greater flexibility and can help to avoid currency crises caused by fixed exchange rates or managed floats.

An Exchange Rate System in Which Governments and Central Banks