Question
With a flexible exchange-rate system, what determines the exchange rate between two countries?
A.
supply and demand
B.
the day-to-day changes in one currency
C.
inflation and interest rates
D.
the value of gold
A.
supply and demand
B.
the day-to-day changes in one currency
C.
inflation and interest rates
D.
the value of gold
Answers
GPT-4o mini
The correct answer is:
A. supply and demand
In a flexible exchange-rate system, the exchange rate between two currencies is primarily determined by the supply and demand for those currencies in the foreign exchange market. Factors influencing this include economic conditions, trade balances, interest rates, inflation, and investor perceptions.
A. supply and demand
In a flexible exchange-rate system, the exchange rate between two currencies is primarily determined by the supply and demand for those currencies in the foreign exchange market. Factors influencing this include economic conditions, trade balances, interest rates, inflation, and investor perceptions.