Which of the following best describes exchanges rates that are determined by the demand and supply foreign exchange in the absence of official intervention?
A) floating exchange rates
B) the gold standard
C) fixed exchange rates
D) the Bretton Woods system

Question

Quizplus · Accepted Answer

Floating exchange rates are determined by the market forces of supply and demand for foreign currencies, without any government intervention. The rates fluctuate based on factors such as trade flows, investment flows, and economic performance, making them more flexible and reflecting the true market value of currencies. On the other hand, fixed exchange rates are set by governments or central banks and are pegged to a specific value or currency, while the gold standard and the Bretton Woods system are fixed exchange rate regimes that have been abandoned.

Which of the Following Best Describes Exchanges Rates That Are