Answer (C) is correct . Although currencies can be supported by various means for short periods, the primary determinant of exchange rates is the supply of and demand for the various currencies. Under current international agreements, exchange rates are allowed to “float.”? During periods of extreme fluctuations, however, governments and control banks may intervene to maintain stability in the market.
Answer (A) is incorrect because Governments have only temporary influence, if any, on the setting of exchange rates.
Answer (B) is incorrect because The International Monetary Fund has only temporary influence, if any, on the setting of exchange rates.
Answer (D) is incorrect because Exporters and importers have only temporary influence, if any, on the setting of exchange rates.
|
