1. The current international monetary system can be called
A. a managed float exchange rate system because currencies are allowed to fluctuate, but government central banks intervene when a currency is considered over-valued or under-valued.
B. a flexible exchange rate system because the value of a currency is determined by the demand and supply of that currency in international markets with no government intervention whatsoever.
C. a freely floating exchange rate system because the value of a currency is freely determined in the international market without any government intervention or controls.
D. a fixed exchange rate system because supply and demand actually has little to do with determining the value of any currency in international markets.
2. The current international monetary system can be more correctly called
A. a managed float exchange rate system because currencies are allowed to fluctuate but government central banks intervene when a currency is over valued or undervalued.
B. a fixed exchange rate system because the value of a currency is set by the G-7 participating countries.
C. a free float exchange rate system because the value of a currency is freely determined in the international monetary market without any government controls.
D. None of the above.