Some claim that the long and agonizing periods of speculation preceding exchange rate realignments would
A)not occur under fixed exchange rate regime.
B)not occur under floating.
C)become more severe under currency board.
D)become less severe under floating.
E)be prolonged under floating.

Question

Quizplus · Accepted Answer

Under a floating exchange rate regime, exchange rates are determined by market forces, which can adjust more quickly to changes in economic conditions, reducing the prolonged periods of speculation that might occur under fixed or pegged systems.

Some Claim That the Long and Agonizing Periods of Speculation