Which of the following is not considered a result of the flexible exchange rate system?
A)Future markets have been used to hedge exchange rate risk.
B)Competition tends to set the rates.
C)Exchange rates fluctuate on a daily basis.
D)The exchange rate has been slow to change.

Question

Quizplus · Accepted Answer

The statement "The exchange rate has been slow to change" is not considered a result of the flexible exchange rate system. In fact, the flexibility of the exchange rate system allows for rapid changes in exchange rates in response to market forces. A slow change in exchange rates would be more characteristic of a fixed exchange rate system. A, B, and C are all considered results of the flexible exchange rate system.

Which of the Following Is Not Considered a Result of the Flexible