Final answer:
Government treasuries are not typically active participants in a free-floating currency market. Central banks, commercial banks, and currency speculators are the usual participants. Central banks cannot allow their currency to rise indefinitely due to economic repercussions and the increasing cost of maintaining foreign reserves.
Step-by-step explanation:
The participant that is not typically involved in a free-floating currency market is c) Government treasuries. In a free-floating currency system, the supply and demand of a currency, domestic interest rates, and the stock market can influence exchange rates. Central banks, commercial banks, and currency speculators are active participants.
Although central banks can intervene in the market, such as by buying foreign currencies to manage their reserves, government treasuries do not actively trade in the currency markets in the same way. Intervention in the market by central banks is often not unlimited due to the opportunity cost of holding foreign reserves.
One notable reason central banks cannot allow their currency to rise indefinitely is that it can harm the domestic economy by making exports more expensive and reducing the competitiveness of domestic industries.
Furthermore, it increases the cost of maintaining foreign reserves as central banks might have to intervene by selling their currency and buying foreign currencies to keep their currency's value in check.