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World geography miscellaneous

  1. Under flexible exchange rate system, the exchange rate is determined by
    1. the Central Bank of the country
    2. the forces of demand and supply in the foreign exchange market
    3. the price of gold
    4. the purchasing power of currencies
Correct Option: B

A floating exchange rate is a type of exchange rate regime wherein a currency's value is allowed to fluctuate according to the foreign exchange market. It refers to a country's exchange rate regime where its currency is set by the foreign-exchange market through supply and demand for that particular currency relative to other currencies.



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