Question : Which of the following is not a type of exchange rate system?
Option 1: Fixed exchange rate system
Option 2: Floating exchange rate system
Option 3: Managed exchange rate system
Option 4: Inflation targeting exchange rate system
Correct Answer: Inflation targeting exchange rate system
Solution : The correct answer is (d) Inflation targeting exchange rate system
An "inflation targeting exchange rate system" is not a recognized type of exchange rate system. Inflation targeting refers to a monetary policy framework where a central bank sets an explicit target for inflation and adjusts its policy instruments, such as interest rates, to achieve that target.
Question : Which of the following is not a type of exchange rate regime?
Option 1: Fixed exchange rate
Option 2: Floating exchange rate
Option 3: Managed float exchange rate
Option 4: Hybrid exchange rate
Option 3: Hybrid exchange rate
Option 4: Dual exchange rate
Question : Which of the following is not a fixed exchange rate system?
Option 1: Floating exchange rate
Option 2: Pegged exchange rate
Option 4: Currency board arrangement
Option 2: Managed float
Option 3: Free float
Option 4: Managed peg
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.
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