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Floating Exchange Rate is also referred to as
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- Flexible Exchange Rate
- Fixed Exchange Rate
- Real Exchange Rate
- Controlled Exchange Rate
Correct Option: A
A floating exchange rate or fluctuating exchange rate is a type of exchange rate regime wherein a currency's value is allowed to fluctuate according to the foreign exchange market. In this sense, it is quite flexible and not something fixed or constant. Such rates automatically adjust, enabling a country to dampen the impact of shocks and foreign business cycles, and to preempt the possibility of having a balance of payments crisis.