The basic type of intervention by central banks under the managed floating exchange rate system is to:

Question

Quizplus · Accepted Answer

In a managed floating exchange rate system, central banks intervene by buying and selling currencies in order to influence the supply and demand for foreign exchange, thereby affecting the exchange rate. This intervention is aimed at maintaining stability and avoiding excessive volatility in exchange rates. The other options listed (readjusting the peg for exchange rates, renegotiating the rate at which foreign currencies can be converted into gold, and making pronouncements but doing nothing) are not typically used under a managed floating exchange rate system.

The Basic Type of Intervention by Central Banks Under the Managed