Under a System of Managed Floating Exchange Rates, Central Banks

question 61

Multiple Choice

Under a system of managed floating exchange rates, central banks intervene in the foreign exchange market to

• A) moderate long run movements in exchange rates.
• B) reinforce long run movements in exchange rates.
• C) moderate short run fluctuations in exchange rates.
• D) reinforced short run fluctuations in exchange rates.

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Definitions:

Expected Rate of Return

An estimate of the profitability or yield of an investment, accounting for its potential risks and rewards.

Production Process

The method or sequence of operations involved in the conversion of raw materials into finished goods or services.

Added Profit

The additional income earned from an investment, project, or business activity after accounting for all costs and expenses.

Optimal R&D

The most efficient allocation of resources towards research and development activities to maximize innovation and return on investment.