Question : Which of the following is not a type of exchange rate determination?
Option 1: Interest rate parity
Option 2: Purchasing power parity
Option 3: Balance of payments parity
Option 4: Capital account parity
Answer (1)
22nd Jan, 2024
Correct Answer: Balance of payments parity
Solution : The correct answer is (c) Balance of payments parity
Balance of payments parity is not a recognized concept in exchange rate determination. The other options, interest rate parity, purchasing power parity, and capital account parity, are widely recognized theories and frameworks used to explain and analyze exchange rate movements.
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