CUET Preparation Today
Which of the following is true of Floating exchange rate system? |
The current account and capital account add to zero Each account can individually equal to zero. Exchange rate is determined by market forces. All of the above |
Exchange rate is determined by market forces. |
The correct answer is option 3: Exchange rate is determined by market forces. Flexible exchange rate is determined by the market forces of demand and supply. It is also known as Floating Exchange Rate. There is no contribution by the government in influencing the exchange rate. |
