ECONOMICS
TRADE EXCHANGE AND INTERDEPENDENCE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Floating
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Fixed
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Fixed, but adjusted frequently
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None of the above
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Detailed explanation-1: -Is the U.S. Dollar a Fixed or Floating Exchange Rate ? The U.S. dollar is a floating currency, much like most of the major currencies in the world. The value of the dollar floats with its demand in the global currency markets.
Detailed explanation-2: -There are two types of currency exchange rates-floating and fixed. The U.S. dollar and other major currencies are floating currencies-their values change according to how the currency trades on forex markets.
Detailed explanation-3: -Examples of countries with a free-floating exchange rate: Mexico. Poland. United States. EU Monetary Union nations (19)
Detailed explanation-4: -A floating exchange rate is a regime where the currency price of a nation is set by the forex market based on supply and demand relative to other currencies. This is in contrast to a fixed exchange rate, in which the government entirely or predominantly determines the rate.
Detailed explanation-5: -In a free-floating or independent-floating currency, the exchange rate is determined by the market, with foreign exchange intervention occurring only to prevent undue fluctuations. For example, Australia, the United Kingdom, Japan, and the United States have free-floating currencies.