Question

If the United Kingdom allows its currency's exchange rate to be determined by supply and demand, with occasional government intervention, what system is it using?

1) Fixed exchange rate system
2) Floating exchange rate system
3) Pegged exchange rate system
4) Managed float exchange rate system

Answer 1

The United Kingdom is using a floating exchange rate system.

Step-by-step explanation:

The exchange rate system that the United Kingdom is using is a floating exchange rate system.

In a floating exchange rate system, the value of a country's currency is determined by the supply and demand in the foreign exchange market. The government may occasionally intervene in the market to influence the exchange rate, but overall, it allows the market forces to determine the value of the currency.