Given below are two statements, one is labelled as Assertion (A) and the other as Reason (R). Assertion (A): The value of national currency determined by demand and supply of foreign currency is called flexible exchange rate. Reason (R): Demand and supply of the foreign currency is being determined by the Central Bank. Select the correct answer from the codes given below:

Asked in UPPCS Prelims 2024 · Topic: Foreign Exchange Market and Exchange Rate Determination (Exchange Rate Regimes: Fixed, Floating, and Managed Float Systems)

1. Both (A) and (R) are true and (R) is the correct explanation of (A).
2. (A) is false, but (R) is true.
3. Both (A) and (R) are true, but (R) is not the correct explanation of (A).
4. (A) is true, but (R) is false.

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