The Free Floating Exchange Rate System Has Been in Effect

question 35

Multiple Choice

The free floating exchange rate system has been in effect since

• A)1900.
• B)1933.
• C)1945.
• D)1973.
• E)1985.

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Definitions:

Secondary Reserves

Assets that are not immediately liquid but can be quickly converted into cash without significant loss, serving as a secondary buffer for financial institutions.

Legal Reserve Requirement

The minimum amount of reserves a financial institution must hold against deposits, as mandated by regulatory authorities, to ensure liquidity.

Federal Reserve District Banks

The 12 regional banks in the Federal Reserve System of the United States, each responsible for implementing the nation's monetary policy in its region.

Monetary Policy Weapon

Tools used by central banks to control the supply of money in the economy, influencing interest rates and inflation.