Why Is the Current Foreign Exchange System Thought of as a Dirty-Float

question 1

Multiple Choice

Why is the current foreign exchange system thought of as a dirty-float system?

• A)Because of the frequency of government intervention in the foreign exchange market
• B)Because of the extreme volatility in the foreign exchange market
• C)Because it is essentially a system of fixed foreign exchange rates
• D)Because of absolute government control of exchange rates

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Definitions:

Net Worth

The total assets minus total liabilities of an individual or entity, representing financial position at a specific time.

Generally Accepted Accounting Principles

A collection of commonly-followed accounting rules and standards for financial reporting.

Financial Statement Formats

The specific layout and organization of information within financial documents, such as balance sheets and income statements, which comply with accounting standards.

Cash Flow Statement

A financial document that shows the amount of money a business has on hand at the beginning of a time period, receipts coming into the business, and money going out of the business during the same period.