IGNOU IBO 6 2025 - A system of floating exchange rate fails when governments ig

Question

A system of floating exchange rate fails when governments ignore the verdict of the exchange markets on their policies and resort to direct controls over trade and capital flows."

21 Feb 2025

Answer :

Word Count : 180

A system of floating exchange rates generally relies on market forces to determine the value of a currency based on supply and demand dynamics. When governments intervene by ignoring market signals, such as altering their policies

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