Question

Which of the following best explains what happens to the exchange rate of a

floating currency?
The exchange rate for that currency is determined by changes i
the value of the U.S. dollar.
a
B. The exchange rate for that currency increases or decreases
depending on the size of the country's GDP.
C. The exchange rate for that currency goes up and down with the
price of gold.
O
D. The exchange rate for that currency changes depending on the
operations of the free market,​

Answer 1

The exchange rate for that currency changes depending on the operations of the free market.

Explanation: xepa verified

Answer 2

the correct answer is D. The exchange rate for that currency changes depending on the operations of the free market

Explanation:

their is this market called Foreign Exchange market or simply known as the FOREX Market. It is the largest market in the world where trillions of dollars are exchanged daily.

the main determinant of the prices and the exchange rates of the each currency is the market supply and demand. more demand will set the rates higher while more supply will decrease the rates.

nowadays, currencies are not pegged to the gold prices and we abandoned the gold standards some time ago. so gold prices have no effect on the exchange rates now.