APPSC Group-II Mains 2019 Paper III · Question 125

Question 125 of the APPSC Group-II Mains 2019 Paper III (30 August 2019). Try it first, then open the answer and explanation.

1. Mains 2019 · P-III · Q125 · Economy (India & AP) · External Sector

   A floating exchange rate has the following outcome:

   మారే మారకం రేటు ఈ దిగువ ఫలితం ఏర్పరచును:

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   Answer: It encourages arbitrage

   సమాధానం: మధ్యవర్తిత్వాన్ని ప్రోత్సహిస్తుంది

   The official key gives arbitrage: when exchange rates move with market forces, traders can profit from price differences.

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