Floating exchange rates
Floating exchange rates

An exchange rate is the price of one currency expressed in terms of another. In a freely floating system, demand and supply in the foreign exchange market determine the rate without government intervention.
Step-by-step lessons on AQA A Level Economics 2.6.4 Exchange rate systems. Each one builds up to exam-style questions. Start with the core supply-and-demand models before moving on to the more evaluation-heavy macroeconomic policy topics.