Countries with floating exchange rates have currencies:
A)whose values rarely change.
B)that are subject to value changes at regular intervals.
C)that are controlled by currency boards with a great deal of power.
D)whose values may change as economic conditions and market sentiments change.

Question

Quizplus · Accepted Answer

Countries with floating exchange rates have currencies whose values may change as economic conditions and market sentiments change. This means that the exchange rate of a currency is determined by the supply and demand in the market and can fluctuate frequently based on various factors such as inflation, interest rates, and political stability of the country. Therefore, option D is the correct choice. The other choices are incorrect as they do not accurately reflect the nature of a floating exchange rate system.

Countries with Floating Exchange Rates Have Currencies