CUET Economics - Which one of the following represents the dirty floating exchange rate system? | PYQs + Solutions

CUET Economics 2026 19th May Shift 2

Macro

Easy

Movements in the exchange rate automatically take care of the surpluses and deficits in the BoP.

In this exchange rate system, the Government fixes the exchange rate at a particular level.

Central banks intervene to buy and sell foreign currencies in an attempt to moderate exchange rate.

It links the currencies of different countries and enables comparison of international costs and prices.

✅ Correct Option: 3

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21st May Shift 2

Match the LIST-I with LIST-II

	LIST-I		LIST-II
A.	Open Economy	I.	interacts with other countries through various channels.
B.	Output Market	II.	gives investors the opportunity to choose between domestic and foreign assets.
C.	Financial Market	III.	widens choice that consumers and producers can choose between domestic and foreign goods.
D.	Labour Market	IV.	firms can choose where to locate production and workers to choose where to work.

Choose the correct answer from the options given below:

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Arrange the following statements in correct order in the context of flexible exchange rate system.

(A) When income increases, consumer spending increases.

(B) Shift in demand curve for foreign exchange towards right.

(D) Depreciation of domestic currency with respect to foreign currency.

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The price of one currency in terms of another currency is called?

CUET Economics 2026 19th May Shift 2 PYQs