Under Managed Floating Exchange Rates, Central Bank Intervention Is Used

question 148

True/False

Under managed floating exchange rates, central bank intervention is used to offset temporary fluctuations in exchange rates that contribute to uncertainty in carrying out transactions in international trade and finance.

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Definitions:

Legal Obligation

A duty enforced by law, requiring an individual or entity to adhere to a prescribed conduct.

Accredited Investors

Individuals or institutions that meet certain financial criteria and are therefore allowed to invest in certain types of complex and higher-risk financial products.

Securities Act

Legislation that regulates the issuance and sale of securities to protect investors from fraud.

Net Financial Assets

The difference between a person's or entity's total financial assets and total financial liabilities.