Asked by Andrea Weitoschova on Jul 04, 2024
Verified
Under a floating rate system, exchange rates are set by international treaty and administered by the International Monetary Fund.
Floating Rate System
A currency exchange system where the value of a currency is allowed to fluctuate according to the foreign exchange market.
International Treaty
An agreement under international law entered into by countries in written form and governed by international law.
International Monetary Fund
An international organization that aims to promote global economic stability and growth through financial assistance and advice.
- Understand the mechanics and implications of floating versus fixed exchange rate systems.
Verified Answer
KB
Kayla Brown VoilesJul 06, 2024
Final Answer :
False
Explanation :
Under a floating rate system, exchange rates are determined by market forces of supply and demand, and not set by international treaty or administered by the International Monetary Fund.
Learning Objectives
- Understand the mechanics and implications of floating versus fixed exchange rate systems.