Which exchange rate system involves a "leaning against the wind" strategy in which short-term fluctuations in exchange rates are reduced without adhering to any particular exchange rate over the long run?
A) pegged or fixed exchange rates
B) adjustable pegged exchange rates
C) managed floating exchange rates
D) freely floating exchange rates

Question

Quizplus · Accepted Answer

Managed floating exchange rates involve a "leaning against the wind" strategy, in which short-term fluctuations in exchange rates are reduced without adhering to any particular exchange rate over the long run. Pegged or fixed exchange rates involve a fixed exchange rate, adjustable pegged exchange rates involve occasional adjustments to the fixed exchange rate, and freely floating exchange rates have no intervention by the government.

Which Exchange Rate System Involves a "Leaning Against the Wind