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Define flexible exchange rate system...

Define flexible exchange rate system

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Felxible of Floating exchanges rate system refers to a system in which the exchange rate of different currencies is determined by the forces of demand and supply in the foreign exchange market
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Under flexible exchnange rate system , each country fixes its value of currency in terms of some external standard

Under flexible exchange rate system, the exchange rate is determined

Knowledge Check

  • Which theory is used to make long run predictions about exchange rates in a flexible exchange rate system?

    A
    Purchasing Power Parity Theory
    B
    Portfolio Balance Approach
    C
    Interest Rate Approach
    D
    Balance of Payment Theory

  • Which theory is used to make long-run predictions about exchange rates in a flexible exchange rate system?

    A
    Purchasing Power Parity Theory
    B
    Balance of Payment Theory
    C
    Interest Rate Approach
    D
    Portfolio Balance Approach

  • Underflexible exchange rate system, exchange rate is determined ____

    A
    by the government
    B
    by market forces of demand and supply
    C
    by Central Bank of a country
    D
    none of these

    • Similar Questions

    Explore conceptually related problems

    Houge international reserves are required to be maintained by the government in fixed and flexible exchange rate system

    Define fixed exchange rate.

    What is flexible exchange rate?

    In case of flexible exchange rate, rate of foreign exchange does not change.

    Flexible exhange rate system is also known as:

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