Question

The exchange permit can stipulate an unfavorable rate of exchange depending on the desires of the government. A) Convertible currency

B) Exchange control
C) Fixed exchange rate
D) Floating exchange rate

Answer 1

A floating (flexible) exchange rate is an exchange rate regime in which currencies are allowed to fluctuate within margins, based on supply and demand in the foreign exchange market.

Step-by-step explanation:

An exchange rate regime in which governments allow their currencies to fluctuate within margins is referred to as a floating (flexible) exchange rate. Under this regime, the foreign exchange market determines the rates based on supply and demand. The government does not intervene to manage the value of the exchange rate, and the rates can move a great deal in a short time.