On the spectrum of exchange rate policies, a policy where exchange rates are completely determined by market forces is known as _____.
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Vysakh M.
In fixed exchange rate policy, the exchange rate is determined by the market forces of demand and supply of domestic/foreign currencies. the central bank and the latter will intervene in the foreign exchange rate market by buying or selling domestic/foreign currencies to keep the exchange fixed at a pre-determined level. changes in interest rates. changes in the price level.
Aparna S.
If a country wants to avoid large sudden fluctuations in exchange rates and their adverse effects it would choose Responses arbitrage exchange rates policy. floating exchange rates policy. soft peg exchange rates policy.
Sanchit J.
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