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 : 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.
Option 1: Both the statements are true.
Option 2: Both the statements are false.
Option 3: Statement 1 is true and Statement 2 is false
Option 4: Statement 2 is true and Statement 1 is false
Question : _________ is a hybrid system where exchange rate is allowed to float in a managed manner with the control of central bank.
Option 1: Flexible exchange rate
Option 2: Managed floating exchange rate
Option 3: Fixed exchange rate
Option 4: Adjustable peg system
Question : The exchange rate keeps on changing. This type of system is applicable under
Option 1: Fixed exchange rate system
Option 2: Flexible exchange rate system
Option 3: Managed floating rate system
Option 4: None of the above.
Question : Depreciation and appreciation are the part of which exchange rate system?
Question : Revaluation and devaluation are the part of which exchange rate system?
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