Suppose the central bank of a country is making no transactions in the foreign-exchange market.In this case,it is likely that

Question

Quizplus · Accepted Answer

If the central bank is not making any transactions in the foreign-exchange market, it suggests that the exchange rate is being determined freely in the market. The absence of central bank interventions means that the exchange rate depends solely on the supply and demand of currencies, which is the basis for a freely-floating exchange rate system.

Suppose the Central Bank of a Country Is Making No