A managed float exchange rate regime is best described as one in which:

Question

BlackTom AI · Accepted Answer

Explore what a managed float regime means in practice, then evaluate each option.
Option a: 'The exchange rate is allowed to fluctuate within a defined band.' This captures the essence of a managed float (also called a dirty float), where market forces drive the rate but the central bank steps in to prevent excessive volatility and may maintain the rate within a targeted band. This is the textbook description of a managed float.
Option b: 'The rate is determined solely by domestic and foreign investors.' While market forces are important, a true managed float is not determined solely by investors; central bank interventions influence the rate, making this statement incomplete and inaccurate.
Option c: 'Only those parties that have government permits can trade currencies.' In a typical managed float system, the regime refers to how the exchange rate is set or managed, not to restrictions on who can trade currencies. This description confuses regulatory access with exchange-rate policy, so it is incorrect.
Option d: 'None of the options are correct.' Given that option a accurately describes a managed float, this statement is false.
Option e: 'The currency is fixed to gold reserves.' A fixed or gold-standard arrangement is distinct from a managed float; anchoring to gold is not what a managed float describes, so this is incorrect.
In summary, the correct depiction is a regime where the exchange rate is allowed to move within a defined band, with occasional central-bank intervention to maintain that band, and not purely market-determined, unrestricted, or gold-fixed. The other choices either mischaracterize the role of the central bank, regulatory access, or the nature of the exchange-rate regime itself.

A managed float exchange rate regime is best described as one in which:Single choice

Similar Questions

Question17 An exchange rate regime where the domestic currency relative to a foreign currency is held within a defined band is termed as ______________. a pegged exchange rate a free float a managed float a fixed exchange rate a brokered exchange rate ResetMaximum marks: 1 Flag question undefined

Question5 An exchange rate regime where the domestic currency relative to a foreign currency is held within a defined band is termed as ______________. a managed float a free float a pegged exchange rate a brokered exchange rate a fixed exchange rate ResetMaximum marks: 1 Flag question undefined

Question4 An exchange rate regime where the domestic currency relative to a foreign currency is held within a defined band is termed as ______________. a free float a managed float a fixed exchange rate a brokered exchange rate a pegged exchange rate ResetMaximum marks: 1 Flag question undefined

How would you define a currency board?

The intersection of GG and LL for Norway determines

Why does the LL schedule have a negative slope? The economic stability loss from pegging to the area's currencies _ as the degree of economic interdependence _.

Question at position 24 A system in which currencies float against one another, with governments intervening to stabilize their currencies at particular target exchange rates is called a __.managed float systemlinked exchange-rate systemfree float systemfixed exchange-rate system

Among the statements below pick the one which best describes current policy of different countries central banks with respect to exchange rate regimes. Select one – the most appropriate answer.

More Practical Tools for Students Powered by AI Study Helper

Homework AI Solver

Stylized AI Paper Writer

Plagiarism Checker Assistant

Citation AI Academic Writing Tool

In-Class Translation Assistant

AI Note Generator

AI Quiz Answers

Past Exam Questions from University Test Bank

Smart Practice Assistant

Adaptive Practice

Making Your Study Simpler