Question 44
Balance of Payments and Exchange RatesA condition in which official and autonomous exchange rates coexist is
- A.dual exchange rate system
- B.managed floating rate system
- C.market determined exchange rate system
- D.multiple exchange rate system.
Show the answer and explanation
Answer: A (dual exchange rate system)
Explanation
When an official rate and a separate market (autonomous) rate operate at the same time, there are two rates: a dual exchange rate system.