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21 September, 12:21

If government policy allows a country's currency to be determined in the exchange rate market, then that currency will be subject to:

A) a hard peg policy.

B) purchasing power parity.

C) depreciation.

D) a floating exchange rate.

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Answers (1)
  1. 21 September, 12:33
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    The correct answer is D) a floating exchange rate.

    Explanation:

    The floating exchange rate is a characteristic of the currency that is not determined by any central bank, but from operations of supply and demand of the currencies in a stock exchange or the exchange market. This behavior is determined by internal factors and uncertainty such as inflation or natural phenomena, oil behavior, etc.
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Home » Business » If government policy allows a country's currency to be determined in the exchange rate market, then that currency will be subject to: A) a hard peg policy. B) purchasing power parity. C) depreciation. D) a floating exchange rate.
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