Which of the following statements are true?

(A) Managed floating is also called dirty floating
(B) Making domestic currency cheaper by government is called devaluation
(C) Exchange rate determined by the market forces of demand and supply, known as floating exchange rate.
(D) In a fixed exchange rate system, the government fixes the exchange rate.

Choose the correct answer from the options given below :

(A), (B), (C) and (D) Only

Without any formal international agreement, the world has moved on to what can be best described as a managed floating exchange rate system. It is a mixture of a flexible exchange rate system (the float part) and a fixed rate system (the managed part). Under this system, also called dirty floating, central banks intervene to buy and sell foreign currencies in an attempt to moderate exchange rate movements whenever they feel that such actions are appropriate. Official reserve transactions are, therefore, not equal to zero.

In a fixed exchange rate system, when some government action increases the exchange rate (thereby, making domestic currency cheaper) is called Devaluation. On the other hand, a Revaluation is said to occur, when the Government decreases the exchange rate (thereby, making domestic currency costlier) in a fixed exchange rate system.

Flexible Exchange Rate: This exchange rate is determined by the market forces of demand and supply. It is also known as Floating Exchange Rate.

Fixed Exchange Rates: In this exchange rate system, the Government fixes the exchange rate at a particular level.