Under the managed floating system of exchange rates,
A)all exchange rates vary with changes in the free-market prices of gold.
B)industrialized nations meet once each year to negotiate readjustments in their exchange rates.
C)exchange rates are essentially flexible, but governments intervene to offset disorderly fluctuations in rates.
D)exchange rates are adjusted at the discretion of the IMF.

Question

Quizplus · Accepted Answer

Under a managed floating exchange rate system, exchange rates are primarily determined by market forces, but governments or central banks will intervene as necessary to stabilize the currency and counteract volatile fluctuations. This approach allows for flexibility in response to economic indicators while aiming to prevent excessive volatility that could harm the economy.

Under the Managed Floating System of Exchange Rates