A System in Which Exchange Rates Are Set by Government

question 44

Multiple Choice

A system in which exchange rates are set by government policy is called a

• A) managed float system.
• B) free-floating exchange rate system.
• C) commodity standard system.
• D) fixed exchange rate system.

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Definitions:

Excess Cash

Funds that exceed the normal operational needs of a business, which may be invested or used for additional expenditures.

One-Time Payment

A payment that is made in a single installment rather than divided into multiple payments.

Net Working Capital

The difference between a company's current assets and its current liabilities, indicating short-term financial health.

Cash Dividend

A payment made by a company out of its profits to its shareholders in the form of cash.