Under a Managed Float

question 76

Multiple Choice

Under a managed float,

• A) a central bank allows the forces of supply and demand to determine the exchange rate
• B) a nation can have neither a trade deficit nor a trade surplus
• C) a nation "pegs" its price level to a foreign currency
• D) a nation "pegs" its price level at some fixed value
• E) a central bank intervenes in the foreign exchange market to stabilize its exchange rate

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