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Free Floating Exchange Rates

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Please describe the Floating Exchange rate and how it affects the economy relative to 1973.

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Free Floating Exchange Rates

Please describe the Floating Exchange rate and how it effects the economy relative to 1973?

Floating Exchange rate is a system in which the rate of the currency is set by the foreign-exchange market through demand and supply for that currency relative to the rate of other currencies. This is the rate determined by trading on the foreign exchange market. The rate is influenced in part by the actions of the Federal Reserve that buys or sells its own currency.

In 1971 the United States abandoned the fixed exchange rate system and ...

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