Jarinia,a leading global economic power,lets the foreign exchange market determine the relative value of its currency,called the junid.Jarnia's exchange rate regime is called a _____ exchange rate.

Question

Quizplus · Accepted Answer

A floating exchange rate regime allows the market forces of supply and demand to determine the relative value of a currency, without any government intervention. This means that the exchange rate of Jarnia's currency, the junid, is determined by the foreign exchange market and is not fixed or pegged to any other currency. Therefore, the best choice for Jarnia's exchange rate regime is a floating exchange rate, as opposed to a fixed, pegged or forward exchange rate. Nominal exchange rate refers to the price of one currency in terms of another currency.

Jarinia,a Leading Global Economic Power,lets the Foreign Exchange Market Determine