Under a Floating System, the Exchange Rate

question 79

Multiple Choice

Under a floating system, the exchange rate:

• A) fluctuates in response to changing economic conditions.
• B) is maintained at a predetermined level by the central bank.
• C) is changed at regular intervals by the central bank.
• D) fluctuates in response to changes in the price of gold.

---

Definitions:

Discount Period

The timeframe within which a buyer can take advantage of a discount for paying an invoice early.

F.O.B Shipping Point

Free on Board Shipping Point, a term indicating that the buyer takes responsibility for goods the moment they leave the seller's premises.

Discount Period

The time frame in which a buyer may take advantage of a discount offered by a seller for early payment.

Invoice Price

The price at which a product or service is sold, typically listed on an invoice as the cost before any discounts or allowances.