The controlling mechanism for a gold-based exchange system and a floating-rate system are the same.

Question

Quizplus · Accepted Answer

The controlling mechanism for a gold-based exchange system involves the government fixing the value of its currency to a fixed amount of gold reserves, while a floating-rate system involves the value of the currency being determined by the demand and supply in the foreign exchange market. Therefore, the controlling mechanism for these two systems are different.

The Controlling Mechanism for a Gold-Based Exchange System and a Floating-Rate