The frequency of government intervention in the foreign exchange market explains why the current system is sometimes thought of as a(n)_____.
A) fixed exchange rate system
B) managed-float system
C) gold standard system
D) flexible exchange rate system
E) pegged exchange rate system

Question

Quizplus · Accepted Answer

The frequency of government intervention in the foreign exchange market suggests that the current system is a managed-float system. In this type of system, exchange rates are allowed to fluctuate based on market forces but governments may intervene to smooth out excessive volatility or to achieve certain policy objectives.

The Frequency of Government Intervention in the Foreign Exchange Market