Which of the following statements concerning an exchange rate is false?

a. the exchange rate is defined as the difference between the price of one nation's currency and the price of another nation's currency.


b. Government sets a fixed exchange rate, with governmental commitment to buying and selling that currency at the fixed rate.


c. the market forces of supply and demand set a flexible exchange rate.


d. a partially flexible exchange rate means that at times the government simply accepts the market determined price.Which of the following statements concerning an exchange rate is false?
a. False: the explanation showed is an approximated definition of PPA





b.- False: the explanation showed is a definition of exchange rate control system; when a government select fixed exchange rate it does not control it; just put the price of exchange down all the international transactions must be made.





c.- True: down a flexible exchange rate scheme the price of exchange rate is determined by supply and demand rules.





d.- False: down partially flexible exchange rate the governments put a top and a bottom of the value of which the price of exchange rate can fluctuate. If the price get out of these limits then the government intervene.

ie