The 'managed float' exchange rate system means the exchange rate is: MCQ with Answer and Explanation

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The 'managed float' exchange rate system means the exchange rate is:

A. completely fixed

B. not applicable

C. set by the IMF

D. determined by market forces with possible central bank intervention

Answer: Option D

Solution (By JKSSB Mock Tests)

Managed float allows market determination with occasional central bank intervention.

This question belongs to: Economy GK Economy Set 1

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Question #1

Which of the following is a characteristic of the 'First-Generation' models of currency crises?

A. Crises result from inconsistent fundamentals, typically persistent fiscal deficits financed by money creation under a fixed exchange rate

B. Only banking-sector problems matter

C. Crises are purely self-fulfilling without any fundamental weakness

D. Crises never involve reserve losses

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Correct Answer: Option A

Explanation:
First-generation models (Krugman, Flood-Garber) show that a steadily deteriorating fiscal position financed by credit expansion leads to a speculative attack that exhausts reserves and forces the abandonment of the fixed exchange rate.

This question belongs to: Economy GK Economy Set 1

Question #2

Which of the following is a measure of absolute poverty commonly used in India?

A. Relative income share of the bottom 10%

B. Lorenz curve

C. Gini coefficient

D. Poverty line based on calorie norms and consumption expenditure

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Correct Answer: Option D

Explanation:
India has traditionally used a poverty line based on minimum calorie requirements and corresponding consumption expenditure to measure absolute poverty.

This question belongs to: Economy GK Economy Set 1

Question #3

The 'e-way bill' validity is based on:

A. number of goods

B. distance to be travelled

C. value of goods

D. type of vehicle

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Correct Answer: Option B

Explanation:
E-way bill validity depends on the distance of movement.

This question belongs to: Economy GK Economy Set 1

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