Which exchange rate system is characterized by the absence of government intervention ?
Correct answer: C. Both of them
- A. Free float
- B. Clean float
- C. Both of them
- D. None of them
Explanation
A clean float is an exchange-rate arrangement in which the government does not intervene in the foreign-exchange market. Free float is also commonly used for the same no-intervention arrangement, so both listed terms can be correct.
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