Under a Purely Flexible Exchange Rate System

question 88

Multiple Choice

Under a purely flexible exchange rate system

• A)supply and demand set the exchange rates.
• B)governments can set the exchange rate by buying or selling reserves.
• C)governments can set exchange rates with fiscal policy.
• D)answers b and c are correct.

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Definitions:

Economic Progress

An increase in the level of production and consumption in an economy, leading to improvements in the standard of living.

Continuous Improvement

An ongoing effort to enhance products, services, or processes to increase efficiency and quality.

Stated Objective

A clearly defined goal or target that an individual or organization aims to achieve.

Efficiency

The ability to achieve a desired outcome with the minimum expense of time, effort, or resources.