WBCS.LIVE practice question

Under flexible exchange rate system, the exchange rate is determined by-

Solve this multiple-choice question and check the correct answer with its explanation below.

Answer options

  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 answer and explanation

Correct answer: The forces of demand and supply in the foreign exchange market