When the exchange rate is determined by the market forces of demand and supply, it is known as :

Related MCQs

• If the exchange rate is above the equilibrium level then in a floating exchange rate system:
• If the exchange rate is below the equilibrium level then in a floating exchange rate system:
• Which of the following exchange rate policies uses a target exchange rate, but allows the target to change?
• Starting at the point of equilibrium between the money supply and the money demand, an increase in the domestic money supply causes the value of the home currency to:
• Suppose Mexico and the United States were the only two countries in the world. There exists anexcess supply of pesos on the foreign exchange market. This suggests that:
• The Exchange rate is kept the same in all parts of the market through
• An Exchange rate is said to __________ when its short-run response to a change in market Fundamentals is greater than its long-run response. a
• A major difference between the spot market and the forward market is that the spot market deals with:
• The relationship between the exchange rate and the prices of tradable goods is known as the:
• If interest rate parity holds, then the one-year forward rate of a currency will ______ the predicted spot rate of the currency in one year according to the international Fisher effect.