Question : Assertion: Managed floating rate system is a hybrid of foreign exchange rate and a flexible exchange rate system.

Reason: Central Bank maintains reserves of foreign exchange under Managed Floating rate system to ensure that the exchange rate stays within the targeted value.

Option 1: Both Assertion and Reason are true and correct explanation
 

Option 2: Both Assertion and Reason are true and incorrect explanation
 

Option 3: Assertion is true but Reason is false

Option 4: Assertion is false but Reason is true

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)

Question : Which of the following statement is correct?

• Under manage floating rate system, central bank maintains reserves of foreign exchange
• Manage floating rate system is also known as Dirty floating.

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.
 

Question : Identify which of the following statements is true?

Option 1: The flexible exchange rate system gives the government more flexibility to maintain large stocks of foreign exchange reserves
 

Option 2: In the Managed floating exchange rate system, the government intervenes to buy and sell foreign currencies.
 

Option 3: In the Managed floating exchange system, the central bank intervenes to moderate exchange rate fluctuations

Option 4: In the Fixed exchange rate system, market forces fix the exchange rate.

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