2015 · Q51
Under flexible exchange rate system, the exchange rate is determined
General KnowledgeIndian Economy
- Apredominantly by market mechanism
- Bby the Central Bank
- Cas a weighted index of a group of currencies
- Dby the World Trade Organization
Explanation
Under a flexible (floating) exchange-rate system, the exchange rate is determined predominantly by demand and supply in the foreign-exchange market. The central bank may intervene to curb volatility but does not fix the rate, and neither a currency basket nor the WTO determines it. Hence A.