Question

Select the incorrect statement/ statements regarding the exchange rate management by the International Monetary Fund (IMF) using the code given below:
1. Exchange rate of the member countries was managed by the IMF as per the 'fixed currency system' till $1976$. which did not allow the market forces.
2. 'Floating currency system' was first used in $1971$ by the UK.

• A. Only $1$
• B. Only $2$
• C. $1$ and $2$
• D. None of the above

Answer 1

The correct option is A Only $1$

'Fixed currency system' functioned from $1945$ to $1971$. In $1971$, after the UK shifted to the 'floating system', the IMF allowed option to the member countries in selecting the system of exchange rate management through either of these two.