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A floating exchange rate means that the exchange rate is fixed by the

Economics
WAEC 2025

A floating exchange rate means that the exchange rate is fixed by the

  • A. Ministry of Finance
  • B. forces of demand of supply
  • C. central bank of the country
  • D. International Monetary Fund(IMF)
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Correct Answer: Option B
Explanation

A floating exchange rate means that the exchange rate is determined by the forces of demand and supply. In a floating exchange
rate system, when the demand for a currency is low, its value decreases just as with any other product or service. But when the
demand is high, the value increases.


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