Exchange Rates Are ________ Under a Pure "Free Float" System

question 2

Multiple Choice

Exchange rates are ________ under a pure "free float" system.

• A) completely balanced
• B) determined by market forces
• C) wildly variable and unpredictable
• D) determined by the government

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Definitions:

Production Possibilities Frontier

A curve depicting the maximum viable combination of two products that can be produced in an economy, assuming all resources are fully and efficiently utilized.

Economize

To reduce expenses or to use resources carefully and efficiently to reduce waste and save money.

Full Production

The level of production where a company uses all its resources efficiently.

Unemployment Rate

The part of the labor force that is without employment but is actively interested in finding a job.