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Step2247 [10]
3 years ago
6

How are exchange rates determined in a flexible exchange rate system?

Social Studies
1 answer:
marin [14]3 years ago
3 0

Answer:

<em>The correct option is D) supply and demand</em>

Explanation:

In the foreign exchange market, there may be different types of exchange rate systems. A monetary system which depends on supply and demand is known to be a flexible exchange rate system. In contrast, a fixed exchange rate is a type of exchange system in which the rate is fixed by the government and monetary authority. In a flexible exchange rate system, every currency area is free to decide its exchange rate.

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