Which of These Is Defined as an Exchange Rate Regime

question 123

Multiple Choice

Which of these is defined as an exchange rate regime where the country's central bank allows its currency price to float freely between an upper and lower bound and may buy and sell large amounts of it in order to provide price support or resistance?

• A) Foreign market regime
• B) Freely floating regime
• C) Currency market regime
• D) Managed-floating regime

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Definitions:

Overnight Loans

Short-term loans that banks borrow from each other to meet reserve requirements, which must be repaid within one business day.

Municipal Bonds

Tax-exempt bonds issued by state and local governments. General obligation bonds are backed by the general taxing power of the issuer. Revenue bonds are backed by the proceeds from the project or agency they are issued to finance.

Debt Obligation

A commitment to repay borrowed money, typically in the form of loans or bonds, with specific terms and interest rates.