Which of the following statements is TRUE? Question 7 options: Floating exchange rates are relatively stable, whereas merging currencies can change a great deal in a short time. With floating exchange rates, the foreign exchange market determines the exchange rate, whereas with a merging currencies approach, a nation adopts another country's currency. The main difference between floating exchange rates and soft exchange rate pegs is that the market completely determines soft exchange rate pegs, while floating exchange rates are influenced by central bank interventions on occasion. With hard exchange rate pegs, the market determines the exchange rate with some intervention from the central bank, whereas with soft exchange rate pegs, the central bank sets a fixed currency.
Which of the following statements is TRUE? Question 7 options: Floating exchange rates are relatively stable, whereas merging currencies can change a great deal in a short time. With floating exchange rates, the foreign exchange market determines the exchange rate, whereas with a merging currencies approach, a nation adopts another country's currency. The main difference between floating exchange rates and soft exchange rate pegs is that the market completely determines soft exchange rate pegs, while floating exchange rates are influenced by central bank interventions on occasion. With hard exchange rate pegs, the market determines the exchange rate with some intervention from the central bank, whereas with soft exchange rate pegs, the central bank sets a fixed currency.
Micro Economics For Today
10th Edition
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter15: International Trade And Finance
Section: Chapter Questions
Problem 10SQP
Related questions
Question
Which of the following statements is TRUE?
Question 7 options:
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Floating exchange rates are relatively stable, whereas merging currencies can change a great deal in a short time.
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With floating exchange rates, the foreign exchange market determines the exchange rate, whereas with a merging currencies approach, a nation adopts another country's currency.
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The main difference between floating exchange rates and soft exchange rate pegs is that the market completely determines soft exchange rate pegs, while floating exchange rates are influenced by central bank interventions on occasion.
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With hard exchange rate pegs, the market determines the exchange rate with some intervention from the central bank, whereas with soft exchange rate pegs, the central bank sets a fixed currency.
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