Match List - I with List - II.
|
List - I |
List – II |
||
|
(A) |
Flexible exchange rate |
(I) |
Market forces |
|
(B) |
Devaluation |
(II) |
Pegged exchange rate |
|
(C) |
Fixed exchange rate |
(III) |
Floating exchange rate |
|
(D) |
Depreciation |
(IV) |
Government |
Choose the correct answer from the options given below :
Answer & explanation
Correct answer: option 3
The correct answer is Option 3: (A)-(III), (B)-(IV), (C)-(II), (D)-(I)
|
List - I |
List – II |
||
|
(A) |
Flexible exchange rate |
(I) |
Floating exchange rate |
|
(B) |
Devaluation |
(II) |
Government |
|
(C) |
Fixed exchange rate |
(III) |
Pegged exchange rate |
|
(D) |
Depreciation |
(IV) |
|
(A) Flexible exchange rate → (III) Floating exchange rate.A flexible exchange rate is also called a floating exchange rate because it changes according to demand and supply in the foreign exchange market.
(B) Devaluation → (IV) Government. Devaluation is done deliberately by the government or central bank under a fixed exchange rate system.
(C) Fixed exchange rate → (II) Pegged exchange rate. A fixed exchange rate is also known as a pegged exchange rate because the value of currency is fixed against another currency.
(D) Depreciation → (I) Market forces. Depreciation occurs due to market forces such as demand and supply in a flexible exchange rate system.