Define Managed floating rate system
Managed floating rate system: This is a system in which foreign exchange rate is found out by market forces and central bank is a key contributor to stabilize the currency in condition of tremendous appreciation or depreciation.
Why foreign currency or exchange is required? Answer: a) To buy services and goods from other countries. b) To send a gift abroad. c) To buy financial assets in a specific country and d) To contem
If exchange rate of foreign currency downs or falls, its demand rises. Describe how? Answer: If exchange rate falls, an import become cheaper, demand for imports in
The practice considers the Treasury’s elucidation of the consequence on macroeconomic adjustment of joining the euro.
Who won the Nobel Prize for Economics in 1997?
Autonomous or public investment: It is a type of investment that is not of profit motivated.
In simple circular flow model, the only entities which finally consume goods, own resources, pay taxes or bear the loads of inflation, experience joy, or suffer pain, are as: (i) corporations. (ii) Households. (iii) Government agencies. (iv) Business
Flexible exchange rate: The rate of exchange in terms of other currencies is determined by market forces of demand-supply.
Let us suppose that US gasoline market has the demand and supply curvesQd = 10 – 0.5PdQs = -2 + Ps when Ps ≥ 2 and Qs = 0 if Ps < 2, Q : LORENZ CURVE THE AREA BETWEEN THE THE AREA BETWEEN THE LORENZ CURVE OF A COUNTRY AND THE DIAGONAL OF PERFECT EQUALITY REPRESENT
THE AREA BETWEEN THE LORENZ CURVE OF A COUNTRY AND THE DIAGONAL OF PERFECT EQUALITY REPRESENT
Managed floating exchange rate: This is a system in which the central bank or Government permits the exchange rate to identify market forces although they take decisions to intervene whenever they feel it suitable.
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