Question : Another name of flexible exchange rate system is:
Option 1: Adjustable peg system
Option 2: Dirty floating system
Option 3: Floating exchange system
Option 4: Both (a) and (b)
Correct Answer: Floating exchange system
Solution : The correct answer is (c) Floating exchange system.
Another name for the flexible exchange rate system is the floating exchange rate system. In a floating exchange rate system, the exchange rate between two currencies is determined by market forces of supply and demand without any government intervention or fixed peg to another currency. The exchange rate fluctuates freely based on various economic factors such as interest rates, inflation, trade balances, and capital flows. The term "floating" reflects the flexibility and variability of the exchange rate under this system.
Question : _________ is a hybrid system where exchange rate is allowed to float in a managed manner with the control of central bank.
Question : Statement1: Managed floating rate system is a hybrid of fixed exchange rate and a flexible exchange rate system.
Statement 2: Managed floating rate system is also known as Dirty floating.
Question : The exchange rate keeps on changing. This type of system is applicable under
Question : The exchange rate generally remain stable and only a small variation is possible. This type of system is applicable under
Question : Depreciation and appreciation are the part of which exchange rate system?
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