Question

An exchange-rate policy in which the government usually allows the exchange rate to be set by the market, but sometimes intervenes is called a __________________ exchange rate system.

Answer 1

Answer: Managed Float

Step-by-step explanation:

Also called "Dirty Float", the Managed float is an exchange rate system that allows for the currency of a country to be set by the forces of demand and supply in the market.

However, unlike in a clean float, the Central bank will occasionally intervene in the market to influence the how fast the currency is changing value or to control the direction it is going.

This is usually done to protect the domestic economy from sudden shocks in the global economy.