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Home Questions ZFJH2W3SV9
Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Open Economy Macro Economics

Question:
Which of the following statement/statements are true?
Statement 1: Government does not intervene to manage the exchange rate in managed floating system.
Statement 2: Spot market deals in transactions meant for future delivery.
Options:
Both the statements are true.
Both the statements are false.
Statement 1 is true and Statement 2 is false
Statement 2 is true and Statement 1 is false
Correct Answer:
Statement 1 is true and Statement 2 is false
Explanation:
Statement 1 is true, statement 2 is false. Spot market deals in current transactions. Government does not intervene to manage the exchange rate in managed floating system. in managed floating system of exchange rate, government does not intervene rather it is RBI that intervenes sometimes. Government and RBI are different entities.

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