A system in which currencies float against one another,with governments intervening to stabilize their currencies at particular target exchange rates is called a ________.
A) managed float system
B) linked exchange-rate system
C) free float system
D) fixed exchange-rate system

Question

Quizplus · Accepted Answer

A managed float system is a type of exchange rate system in which currencies float against each other but with periodic government intervention in order to stabilize exchange rates at particular target levels. This is different from a free float system where market forces determine exchange rates or a fixed exchange rate system where exchange rates are fixed by government or monetary authority. A linked exchange rate system is a type of fixed exchange rate system where the exchange rate of a currency is fixed to another currency or basket of currencies.

A System in Which Currencies Float Against One Another,with Governments