Which of the following statements is TRUE? Question 7 options: Floating exchange rates are relatively stable, whereas merging currencies can change a great deal in a short time. With floating exchange rates, the foreign exchange market determines the exchange rate, whereas with a merging currencies approach, a nation adopts another country's currency. The main difference between floating exchange rates and soft exchange rate pegs is that the market completely determines soft exchange rate pegs, while floating exchange rates are influenced by central bank interventions on occasion. With hard exchange rate pegs, the market determines the exchange rate with some intervention from the central bank, whereas with soft exchange rate pegs, the central bank sets a fixed currency.

Exchange rate: It refers to the rate at which the economies are exchanging are one another. The…

Answered: Which of the following statements is…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Question

Which of the following statements is TRUE?

Question 7 options:

	Floating exchange rates are relatively stable, whereas merging currencies can change a great deal in a short time.
	With floating exchange rates, the foreign exchange market determines the exchange rate, whereas with a merging currencies approach, a nation adopts another country's currency.
	The main difference between floating exchange rates and soft exchange rate pegs is that the market completely determines soft exchange rate pegs, while floating exchange rates are influenced by central bank interventions on occasion.
	With hard exchange rate pegs, the market determines the exchange rate with some intervention from the central bank, whereas with soft exchange rate pegs, the central bank sets a fixed currency.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions