The exchange value of the U.S dollar is primarily determined by ?
Correct answer: C. the international demand and supply for dollars
- A. the rate of inflation in the United States
- B. the number of dollars printed by the U.S government
- C. the international demand and supply for dollars
- D. the monetary value of gold held at Fort Knox, Kentucky
Explanation
Under modern floating exchange rates, the dollar's exchange value is set by international demand for dollars and the supply of dollars in foreign-exchange markets. Gold holdings and the number of notes printed do not directly determine its exchange rate.
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