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 attempts 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

In a system of managed floating exchange rates, governments allow the exchange rate to fluctuate freely but may intervene or take certain measures to influence its movement within a certain range or limit. This means that while there is no rigidly fixed exchange rate, governments have some degree of control over the exchange rate movements.

A System of Managed Floating Exchange Rates Is