Economics · Foreign Exchange
Which of the following statements correctly describes a 'floating exchange rate' system?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1It permanently maintains a fixed equilibrium between export and import values.
- 2It is determined freely by the market forces of demand and supply.✓
- 3It systematically reduces the foreign exchange reserves of a country.
- 4It only records international transactions of public assets.
Correct answer
It is determined freely by the market forces of demand and supply.
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