A country's _____ exchange rate is determined in international currency exchange markets.
A) nominal
B) fixed
C) flexible
D) real

Question

Quizplus · Accepted Answer

A country's flexible exchange rate is determined in international currency exchange markets, where supply and demand for the currency determine its value in relation to other currencies. Nominal exchange rates refer to the stated value of one currency in relation to another, while fixed exchange rates are set by a government or central bank and do not fluctuate with market forces. Real exchange rates take into account inflation and reflect the actual purchasing power of a currency.

A Country's _____ Exchange Rate Is Determined in International Currency