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Under managed floating exchange rate system, central bank determines the exchange rate and excessive fluctuation is checked by the market forces.
  • a)
    True
  • b)
    False
  • c)
    Partially true
  • d)
    Incomplete statement
Correct answer is option 'B'. Can you explain this answer?
Most Upvoted Answer
Under managed floating exchange rate system, central bank determines t...
False

Explanation:

Under a managed floating exchange rate system, the central bank intervenes in the foreign exchange market to influence the exchange rate but does not fix it entirely. The exchange rate is allowed to fluctuate within a certain range determined by the central bank.

While market forces do play a role in determining the exchange rate, the central bank's interventions can limit the extent of fluctuations. Therefore, excessive fluctuation may not necessarily be checked by market forces alone.

Hence, the statement that "under managed floating exchange rate system, central bank determines the exchange rate and excessive fluctuation is checked by the market forces" is not entirely true and the correct answer is option B, false.
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Under managed floating exchange rate system, central bank determines t...
Under managed floating exchange rate system, market forces determine the exchange rate and excessive fluctuation is checked by the central bank.
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Under managed floating exchange rate system, central bank determines the exchange rate and excessive fluctuation is checked by the market forces.a)Trueb)Falsec)Partially trued)Incomplete statementCorrect answer is option 'B'. Can you explain this answer?
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