Exchange rates:

A) are always fixed between the currencies of two countries.
B) fluctuate to equate the quantity of foreign exchange demanded with the quantity supplied.
C) fluctuate to equate imports and exports.
D) fluctuate to equate interest rates in various countries.
E) fluctuate according to agreements between the governments of various countries.

Exchange rates fluctuate to equate the quantity of foreign exchange demanded with the quantity supplied. The demand and supply of foreign exchange are affected by various factors such as trade flows, capital flows, inflation rates, and interest rates. As these factors change, the demand and supply of foreign exchange also change, leading to fluctuations in exchange rates. Governments and central banks may intervene to influence exchange rates, but ultimately the market forces of supply and demand determine exchange rates.