Question : Which of the following statement is correct?
- Increase in demand for foreign goods means increase in demand for foreign currency.
- Under a manage floating exchange rate system, the government directly controls the exchange rate.
Option 1: Both are true
Option 2: Both are false
Option 3: Statement 1 is true and statement 2 is false.
Option 4: Statement 2 is true and statement 1 is false.
Answer (1)
14th Jan, 2024
Correct Answer:
Both are false
Solution :
Increase in demand for foreign goods means increase in demand for foreign currency.
Under fixed exchange rate system, the government directly controls the exchange rate.
Hence option B is correct .
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