Question : Which of the following is not a type of exchange rate mechanism?
Option 1: Currency peg
Option 2: Currency board
Option 3: Currency basket
Option 4: Currency carpet
Correct Answer: Currency carpet
Solution : The correct answer is (d) Currency carpet.
Currency peg, currency board, and currency basket are all types of exchange rate mechanisms or systems used by countries to determine the value of their currency relative to other currencies.
Currency peg refers to fixing the exchange rate of a country's currency to a specific value or a basket of currencies.
Currency board is a more rigid form of currency peg where the domestic currency is fully backed by a foreign reserve currency, and the central bank is required to maintain the fixed exchange rate.
Currency basket involves a weighted average of multiple currencies used as a reference for the exchange rate of a country's currency.
On the other hand, "currency carpet" is not a recognized term or type of exchange rate mechanism in economics or finance.
Related Questions
Trending Articles/News
