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Economics · Oct / Nov 2024 · Paper 12 · Question 29

2281Foreign exchange rates

The price of the US dollar in terms of other currencies is set by the forces of demand and supply. To what does this statement refer?

  1. Aan alternative method of trade protection
  2. Bthe determination of the exchange rate in a fixed exchange rate system
  3. Cthe determination of the exchange rate in a floating exchange rate system
  4. Dthe increasing globalisation of international trade

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Correct answer: C. the determination of the exchange rate in a floating exchange rate system

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