Practicing Success
Exchange rate determined by the market forces of demand and supply is known as : |
Fixed exchange rate Current exchange rate Constant exchange rate Floating exchange rate |
Floating exchange rate |
The correct answer is option (4) : Floating exchange rate In a floating exchange rate system, the value of a currency fluctuates based on supply and demand in the foreign exchange market. This means the price of one currency relative to another is constantly changing based on various factors like interest rates, inflation, economic stability, and international trade. |