Economics A-Level
Floating exchange rate systems
What Floating exchange rate systems means in Economics A-Level, as defined for AQA.
Definition of Floating exchange rate systems
Check what you remember
Read the wording for your board, then hide it and explain Floating exchange rate systems in your own words. Rough notes are fine. This is a self-check, with no mark or grade.
Reference: AQA
Systems that allow central banks to set interest rates solely for domestic objectives and provide an automatic adjustment mechanism for balance of payments disequilibria, but create uncertainty for exporters and vulnerability to destabilising speculation.
Topics that use Floating exchange rate systems
- Exchange rate systems (AQA A-Level)
Related terms
- Appreciation
- Asymmetric economic shock
- Balance of payments
- Currency union
- Depreciation
- Fixed exchange rate systems
- Freely floating exchange rate system
- Hot money flows
Using Floating exchange rate systems in the exam
Check the command word and mark scheme for your exact question. After comparing your explanation with the reference, use the term in an answer on the linked topic. This practice does not predict an exam mark.
Practise Economics questions
Create a free account to answer exam-style questions on this topic and get feedback on your answers.
Start free
All Economics A-Level termsA week of Premium from your first lesson · Then the free plan continues · No card, no charge