If government policy allows a country's currency to be determined in the exchange rate market, then that currency will be subjec

Question

tia_tia [17]

3 years ago

7

If government policy allows a country's currency to be determined in the exchange rate market, then that currency will be subjec

t to:
A) a hard peg policy.
B) purchasing power parity.
C) depreciation.
D) a floating exchange rate.

Business

1 answer:

Marrrta [24] · Answer 1 · 2021-11-21T03:52:29+03:00

Answer:

The correct answer is D) a floating exchange rate.

Explanation:

The floating exchange rate is a characteristic of the currency that is not determined by any central bank, but from operations of supply and demand of the currencies in a stock exchange or the exchange market. This behavior is determined by internal factors and uncertainty such as inflation or natural phenomena, oil behavior, etc.