If a country's central bank does not intervene in the foreign exchange market, the country has
A)a crawling peg exchange rate policy.
B)a fixed exchange rate policy.
C)a flexible exchange rate policy.
D)no exchange rate policy.
E)a responsible exchange rate policy.

Question

Quizplus · Accepted Answer

If a country's central bank does not intervene in the foreign exchange market, the exchange rate is determined by the forces of supply and demand, resulting in a flexible exchange rate policy.

If a Country's Central Bank Does Not Intervene in the Foreign