Which of the Following Statements Is True About the Various

question 11

Multiple Choice

Which of the following statements is true about the various exchange rate systems?

• A) In a fixed exchange rate system, the value of a currency is adjusted according to the day to day market forces.
• B) In a clean float, the central bank of a country will intervene in the foreign exchange market to try to maintain the value of its currency.
• C) After the collapse of the Bretton Woods system of floating exchange rates in 1973, the world has operated with a fixed exchange rate system.
• D) According to the Bretton Woods system, the value of most currencies in terms of U.S. dollars was allowed to change only under a specific set of circumstances.
• E) In dirty float, the exchange rate between a currency and other currencies is relatively fixed against a reference currency exchange rate.

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