Q. “A domestic currency is left free against a number of foreign currencies in its foreign exchange market and determines its own value” is known as?

[A] Fixed exchange rate system

[B] Floating exchange rate system

[C] Mixed exchange rate system

[D] Domestic exchange rate system

Answer: B
Notes:

Explanation: In the floating exchange rate system, a domestic currency is left free to float against a number of foreign currencies in its foreign exchange market and determine its own value.

Such exchange rates, are also called as market driven or based exchange rates, which are regulated by factors such as the demand and supply of the domestic and the foreign currencies in the concerned economy.

Source: TMH Ramesh Singh