Th4.1: ^^ Managed Floating

Question 1

What is managed floating?

Answer 1

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

Question 2

How is this done?

Answer 2

by buying and selling currency and by changing interest rates

Question 3

What is an adjustable peg system?

Answer 3

where currencies are fixed against another but the level at which they are fixed can be changed

Question 4

What is a managed float / dirty float?

Answer 4

where the government intervenes to improve macroeconomic stability