An exchange-rate system is a set of rules governing how much currencies in the foreign exchange market can
A) rise or fall in value.
B) be traded for imports.
C) be traded for exports.
D) be used to make debt payments.
E) be regulated by the IMF.

Question

Quizplus · Accepted Answer

An exchange-rate system is a set of rules that govern the value of one currency in relation to another. It determines how much a particular currency can rise or fall in relation to another currency in the foreign exchange market. Therefore, option A is the correct answer. The other options are not relevant to an exchange-rate system.

An Exchange-Rate System Is a Set of Rules Governing How