Answered

Which of the following statements are true about floating exchange rates?

Select all that apply:

A. They are determined by market supply and demand.
B. They can lead to greater volatility in currency values.
C. They are fixed by international agreements.
D. They are not impacted by inflation rates.
E. They allow for greater flexibility in responding to economic changes.



Answer :

GinnyAnswer

Final answer:

Floating exchange rates are determined by market supply and demand, providing flexibility in responding to economic changes while potentially leading to greater volatility in currency values.


Explanation:

Floating exchange rates are determined by market supply and demand, allowing for greater flexibility in responding to economic changes. They can lead to greater volatility in currency values, as they fluctuate based on various factors such as international capital flows, productivity growth, and inflation rates.


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