Economic Awareness - Sectors of Indian Economy
In which exchange rate system does the currency value fluctuate freely according to market demand and supply without any direct intervention by the government or central bank?
In which exchange rate system does the currency value fluctuate freely according to market demand and supply without any direct intervention by the government or central bank?
easy Q12 of 15
Step-by-Step Solution
Step 1: Understand the concept
The question is about the floating exchange rate system where currency value is determined solely by market forces.Step 2: Analyze the options
Floating exchange rate means no government or central bank intervention; currency fluctuates freely based on demand and supply.Final Answer:
Floating Exchange Rate → Option AQuick Check:
Floating exchange rate = market forces determine currency value freely ✅
Quick Trick: Floating = Free market determines currency value.
Common Mistakes:
MISTAKES- Mistaking managed float for floating as both involve market forces.
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