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Assertion (A): Manage floating exchange rate system is a hybrid system of exchange rate used by the most of the countries in recent time.
Reason (R): Excessive fluctuation in exchange rate system is checked by the central authority under dirty floating exchange rate.
Alternatives
Reason (R): Excessive fluctuation in exchange rate system is checked by the central authority under dirty floating exchange rate.
Alternatives
- a)Assertion (A) is true and Resason (R)is a correct reason of Assertion (A)
- b)Assertion (A) is true and Resason (R)is not a correct reason of Assertion (A)
- c)Assertion (A) is false, but Resason (R) is true
- d)Both are false
Correct answer is option 'A'. Can you explain this answer?
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Most Upvoted Answer
Assertion (A): Manage floating exchange rate system is a hybrid system...
Assertion (A): Managed floating exchange rate system is a hybrid system of exchange rate used by most countries in recent times.
Reason (R): Excessive fluctuation in the exchange rate system is checked by the central authority under dirty floating exchange rate.
Explanation:
Managed Floating Exchange Rate System:
- Managed floating exchange rate system is a hybrid system of exchange rate that combines elements of both fixed and floating exchange rate systems.
- Under this system, the value of a currency is determined by market forces of supply and demand, but the central bank intervenes in the foreign exchange market to influence the exchange rate.
- The central bank uses various tools such as buying or selling foreign currency reserves, adjusting interest rates, and implementing monetary policy measures to influence the exchange rate.
Excessive Fluctuation in Exchange Rate:
- Excessive fluctuation in exchange rates can have negative impacts on the economy.
- It can lead to uncertainty in international trade, investment, and capital flows.
- It can also create instability in financial markets and increase the risk for businesses and investors.
- Therefore, it is important for central authorities to check excessive fluctuations in exchange rates to maintain stability and promote economic growth.
Explanation of Assertion (A):
- The assertion states that managed floating exchange rate system is a hybrid system of exchange rate used by most countries in recent times.
- This assertion is true as many countries have adopted managed floating exchange rate systems to benefit from the flexibility of market forces while preventing excessive fluctuations in exchange rates.
- The managed floating exchange rate system allows countries to maintain some control over their exchange rates through central bank interventions.
Explanation of Reason (R):
- The reason states that excessive fluctuation in the exchange rate system is checked by the central authority under dirty floating exchange rate.
- This reason is not a correct reason for Assertion (A) as it mentions "dirty floating exchange rate" which is not the same as managed floating exchange rate system.
- Dirty floating exchange rate refers to a system where the exchange rate is determined by market forces with minimal intervention from central authorities.
- In dirty floating exchange rate, excessive fluctuation may not be actively checked by the central authority.
Conclusion:
- Assertion (A) is true as managed floating exchange rate system is indeed a hybrid system used by most countries in recent times.
- Reason (R) is not a correct reason for Assertion (A) as it refers to dirty floating exchange rate which is different from managed floating exchange rate system.
Reason (R): Excessive fluctuation in the exchange rate system is checked by the central authority under dirty floating exchange rate.
Explanation:
Managed Floating Exchange Rate System:
- Managed floating exchange rate system is a hybrid system of exchange rate that combines elements of both fixed and floating exchange rate systems.
- Under this system, the value of a currency is determined by market forces of supply and demand, but the central bank intervenes in the foreign exchange market to influence the exchange rate.
- The central bank uses various tools such as buying or selling foreign currency reserves, adjusting interest rates, and implementing monetary policy measures to influence the exchange rate.
Excessive Fluctuation in Exchange Rate:
- Excessive fluctuation in exchange rates can have negative impacts on the economy.
- It can lead to uncertainty in international trade, investment, and capital flows.
- It can also create instability in financial markets and increase the risk for businesses and investors.
- Therefore, it is important for central authorities to check excessive fluctuations in exchange rates to maintain stability and promote economic growth.
Explanation of Assertion (A):
- The assertion states that managed floating exchange rate system is a hybrid system of exchange rate used by most countries in recent times.
- This assertion is true as many countries have adopted managed floating exchange rate systems to benefit from the flexibility of market forces while preventing excessive fluctuations in exchange rates.
- The managed floating exchange rate system allows countries to maintain some control over their exchange rates through central bank interventions.
Explanation of Reason (R):
- The reason states that excessive fluctuation in the exchange rate system is checked by the central authority under dirty floating exchange rate.
- This reason is not a correct reason for Assertion (A) as it mentions "dirty floating exchange rate" which is not the same as managed floating exchange rate system.
- Dirty floating exchange rate refers to a system where the exchange rate is determined by market forces with minimal intervention from central authorities.
- In dirty floating exchange rate, excessive fluctuation may not be actively checked by the central authority.
Conclusion:
- Assertion (A) is true as managed floating exchange rate system is indeed a hybrid system used by most countries in recent times.
- Reason (R) is not a correct reason for Assertion (A) as it refers to dirty floating exchange rate which is different from managed floating exchange rate system.
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Assertion (A): Manage floating exchange rate system is a hybrid system...
Under managed floating exchange rate, price is determined by the market forces however, excessive fluctuation is checked by the central bank. Thus, this system has components of both fixed and floating exchange rate system and known as dirty floating exchange rate.
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Assertion (A): Manage floating exchange rate system is a hybrid system of exchange rate used by the most of the countries in recent time.Reason (R): Excessive fluctuation in exchange rate system is checked by the central authority under dirty floating exchange rate.Alternativesa)Assertion (A) is true and Resason (R)is a correct reason of Assertion (A)b)Assertion (A) is true and Resason (R)is not a correct reason of Assertion (A)c)Assertion (A) is false, but Resason (R) is trued)Both are falseCorrect answer is option 'A'. Can you explain this answer?
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Assertion (A): Manage floating exchange rate system is a hybrid system of exchange rate used by the most of the countries in recent time.Reason (R): Excessive fluctuation in exchange rate system is checked by the central authority under dirty floating exchange rate.Alternativesa)Assertion (A) is true and Resason (R)is a correct reason of Assertion (A)b)Assertion (A) is true and Resason (R)is not a correct reason of Assertion (A)c)Assertion (A) is false, but Resason (R) is trued)Both are falseCorrect answer is option 'A'. Can you explain this answer? for Class 12 2024 is part of Class 12 preparation. The Question and answers have been prepared according to the Class 12 exam syllabus. Information about Assertion (A): Manage floating exchange rate system is a hybrid system of exchange rate used by the most of the countries in recent time.Reason (R): Excessive fluctuation in exchange rate system is checked by the central authority under dirty floating exchange rate.Alternativesa)Assertion (A) is true and Resason (R)is a correct reason of Assertion (A)b)Assertion (A) is true and Resason (R)is not a correct reason of Assertion (A)c)Assertion (A) is false, but Resason (R) is trued)Both are falseCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for Class 12 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Assertion (A): Manage floating exchange rate system is a hybrid system of exchange rate used by the most of the countries in recent time.Reason (R): Excessive fluctuation in exchange rate system is checked by the central authority under dirty floating exchange rate.Alternativesa)Assertion (A) is true and Resason (R)is a correct reason of Assertion (A)b)Assertion (A) is true and Resason (R)is not a correct reason of Assertion (A)c)Assertion (A) is false, but Resason (R) is trued)Both are falseCorrect answer is option 'A'. Can you explain this answer?.
Assertion (A): Manage floating exchange rate system is a hybrid system of exchange rate used by the most of the countries in recent time.Reason (R): Excessive fluctuation in exchange rate system is checked by the central authority under dirty floating exchange rate.Alternativesa)Assertion (A) is true and Resason (R)is a correct reason of Assertion (A)b)Assertion (A) is true and Resason (R)is not a correct reason of Assertion (A)c)Assertion (A) is false, but Resason (R) is trued)Both are falseCorrect answer is option 'A'. Can you explain this answer? for Class 12 2024 is part of Class 12 preparation. The Question and answers have been prepared according to the Class 12 exam syllabus. Information about Assertion (A): Manage floating exchange rate system is a hybrid system of exchange rate used by the most of the countries in recent time.Reason (R): Excessive fluctuation in exchange rate system is checked by the central authority under dirty floating exchange rate.Alternativesa)Assertion (A) is true and Resason (R)is a correct reason of Assertion (A)b)Assertion (A) is true and Resason (R)is not a correct reason of Assertion (A)c)Assertion (A) is false, but Resason (R) is trued)Both are falseCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for Class 12 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Assertion (A): Manage floating exchange rate system is a hybrid system of exchange rate used by the most of the countries in recent time.Reason (R): Excessive fluctuation in exchange rate system is checked by the central authority under dirty floating exchange rate.Alternativesa)Assertion (A) is true and Resason (R)is a correct reason of Assertion (A)b)Assertion (A) is true and Resason (R)is not a correct reason of Assertion (A)c)Assertion (A) is false, but Resason (R) is trued)Both are falseCorrect answer is option 'A'. Can you explain this answer?.
Solutions for Assertion (A): Manage floating exchange rate system is a hybrid system of exchange rate used by the most of the countries in recent time.Reason (R): Excessive fluctuation in exchange rate system is checked by the central authority under dirty floating exchange rate.Alternativesa)Assertion (A) is true and Resason (R)is a correct reason of Assertion (A)b)Assertion (A) is true and Resason (R)is not a correct reason of Assertion (A)c)Assertion (A) is false, but Resason (R) is trued)Both are falseCorrect answer is option 'A'. Can you explain this answer? in English & in Hindi are available as part of our courses for Class 12.
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ample number of questions to practice Assertion (A): Manage floating exchange rate system is a hybrid system of exchange rate used by the most of the countries in recent time.Reason (R): Excessive fluctuation in exchange rate system is checked by the central authority under dirty floating exchange rate.Alternativesa)Assertion (A) is true and Resason (R)is a correct reason of Assertion (A)b)Assertion (A) is true and Resason (R)is not a correct reason of Assertion (A)c)Assertion (A) is false, but Resason (R) is trued)Both are falseCorrect answer is option 'A'. Can you explain this answer? tests, examples and also practice Class 12 tests.
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