Multiple Choice QuestionEconomists consider the current exchange-rate system to be of which type?Multiple choice question.A government-controlled exchange-rate systemA fixed exchange-rate systemA managed floating exchange-rate systemA gold standard exchange-rate system
Question
Multiple Choice QuestionEconomists consider the current exchange-rate system to be of which type?Multiple choice question.A government-controlled exchange-rate systemA fixed exchange-rate systemA managed floating exchange-rate systemA gold standard exchange-rate system
Solution
The current exchange-rate system is considered by economists to be a managed floating exchange-rate system. This means that the value of a currency is determined by the foreign exchange market, but governments can intervene if the market conditions are unfavorable. This system allows for flexibility and control at the same time.
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