An exchange-rate system in which the exchange rate for converting one currency into another is set by international governmental agreement is called a ________ system.
A) floating exchange-rate
B) fixed exchange-rate
C) cross rate
D) spot rate

Question

Quizplus · Accepted Answer

A fixed exchange-rate system is one in which the exchange rate between two currencies is set and maintained by the government of each respective country or by an international agreement. In contrast, a floating exchange-rate system is determined by market forces of supply and demand. Cross rates are exchange rates between two currencies that are not the official currencies of the country in which the exchange rate is quoted, and spot rates are current exchange rates for immediate delivery of currencies.

An Exchange-Rate System in Which the Exchange Rate for Converting