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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The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
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