Which of the following statements is true about the various exchange rate systems?
A) In a fixed exchange rate system, the value of a currency is adjusted according to the day to day market forces.
B) In a clean float, the central bank of a country will intervene in the foreign exchange market to try to maintain the value of its currency.
C) After the collapse of the Bretton Woods system of floating exchange rates in 1973, the world has operated with a fixed exchange rate system.
D) According to the Bretton Woods system, the value of most currencies in terms of U.S. dollars was allowed to change only under a specific set of circumstances.
E) In dirty float, the exchange rate between a currency and other currencies is relatively fixed against a reference currency exchange rate.
Correct Answer:
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