Under the managed float system of exchange rates:
A)all exchange rates vary with changes in the market price of gold
B)industrialized nations meet once each year to negotiate readjustments in their exchange rates
C)exchange rates are essentially flexible, but governments intervene to offset short-run or "disorderly" fluctuations in rates
D)exchange rates are adjusted at the discretion of international monetary authorities
E)exchange rates are based on quantities of gold

Question

Quizplus · Accepted Answer

Under the managed float system, exchange rates are essentially flexible, but governments may intervene to offset short-term or "disorderly" fluctuations in rates through measures such as buying or selling currencies in the foreign exchange market. This allows countries to have some control over their exchange rates, while still allowing them to adjust to market forces. The system does not involve linking exchange rates to gold, nor does it involve annual negotiations among industrialized nations.

Under the Managed Float System of Exchange Rates