The exchange rate system that best characterizes the present international monetary arrangement used by industrialized countries is ?
Correct answer: C. managed floating exchange rates
- A. freely fluctuating exchange rates
- B. adjustable pegged exchange rates
- C. managed floating exchange rates
- D. pegged or fixed exchange rates
Explanation
Industrialized countries generally allow market forces to determine exchange rates while permitting central banks to intervene when necessary. This combination is called a managed float, rather than a completely free float or a fixed peg.
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