An exchange rate regime in which policymakers allow the value of the domestic currency to be determined only by market forces is called a:
A) pegged with bands system.
B) currency basket system.
C) float.
D) dirty or managed float.

Question

Quizplus · Accepted Answer

A float, also known as a free float or clean float, is an exchange rate regime in which the value of a currency is determined solely by supply and demand in the foreign exchange market. Unlike a pegged system, there is no government intervention to artificially control or influence the exchange rate.

An Exchange Rate Regime in Which Policymakers Allow the Value