Q. 22

(a) Define ‘‘Trad

Answer :

a) Trade surplus is the situation when the exports of goods and services exceed the imports of goods and services.

Trade deficit: Trade surplus is the situation when the exports of goods and services fall short of the imports of goods and services.


b)


● Managed floating exchange rate system is a combination of a fixed exchange rate system and the floating exchange rate system.


● The foreign exchange market is allowed to freely operate.


● They have to follow an official declaration of rules for intervention by the central monetary authority of the country.


● This type of exchange rate system determines the exchange rate by the forces of the market with regular intervention by the monetary authority of the country.


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