6.Identify the correct statementa. The government keeps reserves of fo – InterviewSolution

1.

6.Identify the correct statementa. The government keeps reserves of foreignexchange to influence the exchange rate underflexible exchange rate system.b. Devaluation takes place under flexibleexchange rate system.c. Under devaluation exchange rate increasesdue to market forces of demand and supply.d. Under appreciation the exchange rate falls. (1)

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Answer is (B) .

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