Th4.1: ^^ Managed Floating Flashcards
1
Q
What is managed floating?
A
where the value of the currency is determined by demand and supply but the Central Bank will try to prevent large changes in the exchange rate on a day to day basis
2
Q
How is this done?
A
by buying and selling currency and by changing interest rates
3
Q
What is an adjustable peg system?
A
where currencies are fixed against another but the level at which they are fixed can be changed
4
Q
What is a managed float / dirty float?
A
where the government intervenes to improve macroeconomic stability
