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Q. |
Under flexible exchange rate system, the exchange rate is determined by - |
A. | the Central Bank of the country |
B. | the forces of demand and supply in the foreign exchange market |
C. | the price of gold |
D. | the purchasing power of currencies |
Answer» B. the forces of demand and supply in the foreign exchange market | |
Explanation: A floating exchange rate is a type of exchange rate regime wherein a currency's value is allowed to fluctuate according to the foreign exchange market. It refers to a country's exchange rate regime where its currency is set by the foreign-exchange market through supply and demand for that particular currency relative to other currencies. |
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