Under a Floating Exchange Rate, the Exchange Rate

question 205

Multiple Choice

Under a floating exchange rate, the exchange rate

• A)will change whenever the price of gold changes.
• B)is controlled by central bank intervention.
• C)is determined by the interaction of supply of the currency and demand for the currency.
• D)is pegged against the euro.
• E)is determined by price of gold.

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Definitions:

Minority Influence

The process by which dissenters (or numerical minorities) produce attitude change within a group, despite the extraordinary risk of social rejection and disturbance of the status quo.

Consistency

The quality of being uniform, unchanging, and reliable in nature, often considered a virtue in various contexts.

Normative Influence

Social pressures that encourage conformity to the expectations and norms of a group, leading individuals to change their behaviors or beliefs to fit in.

Minority Influence

The process by which a smaller portion of a group can change the opinions, attitudes, or behaviors of the larger group, often through consistent and confident positions.