Which of the following applies to a managed float system?
I. Governments and central banks seek to influence exchange rates by buying or selling their own currencies.
II. The exchange rates are allowed to float, but their values are influenced by governments.
III. Governments intervene to prevent large and sudden swings in the exchange rate.

Question

Which of the following applies to a managed float system? 
I. Governments and central banks seek to influence exchange rates by buying or selling their own currencies.
II. The exchange rates are allowed to float, but their values are influenced by governments.
III. Governments intervene to prevent large and sudden swings in the exchange rate.

Quizplus · Accepted Answer

A managed float system involves governments and central banks influencing exchange rates by buying or selling currencies (I), allowing exchange rates to float but still being influenced by government actions (II), and intervening to prevent large and sudden swings in exchange rates (III).

Which of the Following Applies to a Managed Float System