Answered

A country that sets the value of its currency based on the value of another
world currency has a(n) _exchange rate.
O A. inflated
O
B. fixed
C. trade-weighted
D. flexible

Verified Answer :

GinnyAnswer

Final answer:

A detailed explanation of fixed and floating exchange rate systems and their characteristics.


Explanation:

Fixed exchange rate system: In a fixed exchange rate system, a country's government determines the value of its currency against another currency or a commodity like gold. This system provides stability but can face challenges when economic conditions change.

Floating exchange rate system: Under a floating exchange rate system, a country's currency value fluctuates based on supply and demand in the market. This system allows for adjustments in response to economic changes and is more flexible.


Learn more about exchange rate systems here:

https://brainly.com/question/33619440


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