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With reference to Managed FloatingExchangeRate System, considerthefollowing statements:
It is a system in which central bankallows theexchange rate to be
determined by the market but intervenes at times.
Managed Floating Exchange Rate System is followed in India.
Which of the statements given above are correct?
- a)1 only
- b)2 only
- c)Both 1 and 2
- d)Neither 1 nor 2
Correct answer is option 'C'. Can you explain this answer?
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Most Upvoted Answer
With reference to Managed FloatingExchangeRate System, considerthefol...
Managed Floating Exchange Rate System
Definition:
A managed floating exchange rate system is a type of exchange rate system in which the exchange rate is allowed to be determined by the market forces of demand and supply but the central bank of the country intervenes at times to smoothen out the fluctuations in the exchange rate.
Statements:
1. It is a system in which the central bank allows the exchange rate to be determined by the market but intervenes at times.
This statement is correct. In a managed floating exchange rate system, the central bank allows the exchange rate to be determined by the market but intervenes at times to avoid any extreme fluctuations in the exchange rate.
2. Managed Floating Exchange Rate System is followed in India.
This statement is also correct. India follows a managed floating exchange rate system where the exchange rate is determined by the market forces of demand and supply but the Reserve Bank of India (RBI) intervenes at times to maintain stability in the exchange rate.
Conclusion:
Both the statements are correct, hence the correct answer is option 'C' - Both 1 and 2. India follows a managed floating exchange rate system where the exchange rate is allowed to be determined by the market forces of demand and supply but the RBI intervenes at times to maintain stability in the exchange rate.
Definition:
A managed floating exchange rate system is a type of exchange rate system in which the exchange rate is allowed to be determined by the market forces of demand and supply but the central bank of the country intervenes at times to smoothen out the fluctuations in the exchange rate.
Statements:
1. It is a system in which the central bank allows the exchange rate to be determined by the market but intervenes at times.
This statement is correct. In a managed floating exchange rate system, the central bank allows the exchange rate to be determined by the market but intervenes at times to avoid any extreme fluctuations in the exchange rate.
2. Managed Floating Exchange Rate System is followed in India.
This statement is also correct. India follows a managed floating exchange rate system where the exchange rate is determined by the market forces of demand and supply but the Reserve Bank of India (RBI) intervenes at times to maintain stability in the exchange rate.
Conclusion:
Both the statements are correct, hence the correct answer is option 'C' - Both 1 and 2. India follows a managed floating exchange rate system where the exchange rate is allowed to be determined by the market forces of demand and supply but the RBI intervenes at times to maintain stability in the exchange rate.
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Community Answer
With reference to Managed FloatingExchangeRate System, considerthefol...
- Managed floating exchange rate system is a system in which the central bank allows the exchange rate to be determined by market forces but intervene at times to influence the rate. Hence statement 1 is correct.
- India follows a managed floating exchange rate system. RBI acts as a controller in the exchange rate market. Hence statement 2 is correct.
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With reference to Managed FloatingExchangeRate System, considerthefollowing statements: It is a system in which central bankallows theexchange rate to be determined by the market but intervenes at times. Managed Floating Exchange Rate System is followed in India. Which of the statements given above are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer?
Question Description
With reference to Managed FloatingExchangeRate System, considerthefollowing statements: It is a system in which central bankallows theexchange rate to be determined by the market but intervenes at times. Managed Floating Exchange Rate System is followed in India. Which of the statements given above are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about With reference to Managed FloatingExchangeRate System, considerthefollowing statements: It is a system in which central bankallows theexchange rate to be determined by the market but intervenes at times. Managed Floating Exchange Rate System is followed in India. Which of the statements given above are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for With reference to Managed FloatingExchangeRate System, considerthefollowing statements: It is a system in which central bankallows theexchange rate to be determined by the market but intervenes at times. Managed Floating Exchange Rate System is followed in India. Which of the statements given above are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer?.
With reference to Managed FloatingExchangeRate System, considerthefollowing statements: It is a system in which central bankallows theexchange rate to be determined by the market but intervenes at times. Managed Floating Exchange Rate System is followed in India. Which of the statements given above are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about With reference to Managed FloatingExchangeRate System, considerthefollowing statements: It is a system in which central bankallows theexchange rate to be determined by the market but intervenes at times. Managed Floating Exchange Rate System is followed in India. Which of the statements given above are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for With reference to Managed FloatingExchangeRate System, considerthefollowing statements: It is a system in which central bankallows theexchange rate to be determined by the market but intervenes at times. Managed Floating Exchange Rate System is followed in India. Which of the statements given above are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer?.
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