What is the name of the exchange rate system in which countries allow the value of their currency to be determined freely in the foreign exchange markets around the world without any government restrictions?

Question

Quizplus · Accepted Answer

The description matches that of a floating exchange rate system, where the value of a currency is determined by supply and demand in the open market and not by government intervention. Option A refers to the currency used by European Union members, B refers to a fixed exchange rate system, and D refers to a system where exchange rates are allowed to fluctuate but with occasional government intervention.

What Is the Name of the Exchange Rate System in Which