In a system with a floating exchange rate, what primarily determines the currency's value?

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The government actively manages the exchange rate through interventionsThe currency's value fluctuates to balance its supply and demand in the marketThe balance of payments must consistently show a surplusThe balance of payments is always equal to the government's budget

Explanation

In a floating exchange rate system, the currency's value is set by market forces, meaning it changes to balance the supply and demand for the currency. Government intervention to control the rate is minimal or absent, and the balance of payments does not necessarily have to be in surplus or match the government budget.