The exchange-rate system that best characterizes the present international monetary arrangement used by industrialized countries is:
A) Freely fluctuating exchange rates
B) Adjustable pegged exchange rates
C) Managed floating exchange rates
D) Pegged or fixed exchange rates

Question

Quizplus · Accepted Answer

The present international monetary arrangement used by industrialized countries is a managed floating exchange rate system. In this system, exchange rates are allowed to fluctuate within a certain range, but central banks intervene and manage the fluctuations to prevent extreme volatility. This system provides a balance between the flexibility of freely fluctuating exchange rates and the stability of fixed exchange rates.

The Exchange-Rate System That Best Characterizes the Present International Monetary