A Floating Exchange Rate Does NOT

question 22

Multiple Choice

A floating exchange rate does NOT:

• A)establish the domestic currency value of foreign assets and liabilities
• B)perform price discovery
• C)reduce short-term volatility
• D)establish the price of goods and services sold and purchased in foreign currencies
• E)help economies adjust to changing economic circumstances.

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Definitions:

Acknowledge

To recognize or admit the existence, truth, or reality of something.

Intent

The purpose or plan behind an action or decision, often implying a degree of deliberation.

Decrease Sugar

The objective of reducing sugar intake in one's diet, often to improve health outcomes such as weight management or blood sugar control.

Chocolate Cake

A sweet baked dessert made from cocoa, sugar, flour, and other ingredients, often layered with frosting or filling.