The two varieties of exchange-rate systems are
A) supply and demand for foreign exchange.
B) dollar exchange rate and foreign exchange rate.
C) ﬂexible- or ﬂoating-rate and ﬁxed-rate.
D) depreciating rate and appreciating rate.

Question

Quizplus · Accepted Answer

The two varieties of exchange-rate systems are flexible- or floating-rate and fixed-rate. In a flexible- or floating-rate system, exchange rates are determined by market forces of supply and demand, while in a fixed-rate system, the exchange rate is set and maintained by government intervention.

The Two Varieties of Exchange-Rate Systems Are