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.
Question : Which of the following exchange rate systems is a combination of fixed and floating exchange rates, where the central bank occasionally intervenes in the foreign exchange market?
Option 1: Managed float exchange rate
Option 2: Pegged exchange rate
Option 3: Currency board arrangement
Option 4: Crawling peg exchange rate
Question : Which of the following is not a type of exchange rate regime?
Option 1: Fixed exchange rate
Option 2: Managed float
Option 3: Free float
Option 4: Managed peg
Question : What is the term used to describe the exchange rate regime where a currency's value is fixed to another currency or a basket of currencies?
Option 1: Floating exchange rate
Option 2: Managed float exchange rate
Option 3: Pegged exchange rate
Option 4: Currency board arrangement
Question : Which of the following is not a type of exchange rate system?
Option 2: Floating exchange rate
Option 3: Hybrid exchange rate
Option 4: Dual exchange rate
Option 3: Managed float exchange rate
Option 4: Hybrid exchange rate
Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile