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Question
Identify the correctly matched pairs from Column I and Column II.
| Column I | Column II |
| (1) Flexible exchange rate | (a) Foreign exchange rate determined by the Central Bank |
| (2) Fixed exchange rate | (b) Exchange rate determined by market forces of demand and supply |
| (3) Managed exchange rate | (c) Fall in the value of domestic currency against a foreign currency |
| (4) Depreciation | (d) Central bank buys and sells foreign currency to moderate exchange rate movements |
Match the Columns
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Solution
| Column I | Column II |
| (1) Flexible exchange rate | (b) Exchange rate determined by market forces of demand and supply |
| (2) Fixed exchange rate | (a) Foreign exchange rate determined by the Central Bank |
| (3) Managed exchange rate | (d) Central bank buys and sells foreign currency to moderate exchange rate movements |
| (4) Depreciation | (c) Fall in the value of domestic currency against a foreign currency |
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