In _______________, central banks intervene in the foreign exchange market to try to smooth out fluctuations and nudge the exchange rate in the desired direction.
A) a managed float
B) fixed exchange rates
C) flexible exchange rates
D) the event of a current account surplus

Question

Quizplus · Accepted Answer

In a managed float, also known as a dirty float, central banks intervene in the currency markets to buy or sell their own currency to influence its price, aiming to stabilize or guide the exchange rate without committing to a fixed exchange rate path.

In _______________, Central Banks Intervene in the Foreign Exchange Market