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Discuss briefly the meanings of: (i) Fixed Exchange Rate (ii) Flexible Exchange Rate (iii) Managed Floating Exchange Rate |
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Answer» (i) Fixed Exchange Rate: is the exchange rate determined by the government for conversion of domestic currency into foreign currency. (ii) Flexible Exchange Rate: is the rate of exchange which is determined by the market forces of demand and supply in the foreign exchange market. (iii) Managed Floating Exchange Rate: Floating rate influenced by buying and selling foreign exchange by the central bank in the foreign exchange market. |
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