ECONOMICS
FOREIGN CURRENCY MARKETS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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How much of one country’s money is worth compared to another country?
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Exchange rate
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Exchange control
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Currency
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Foreign trade
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Explanation:
Detailed explanation-1: -An exchange rate is a relative price of one currency expressed in terms of another currency (or group of currencies).
Detailed explanation-2: -Summary. Currency value is determined by aggregate supply and demand. Supply and demand are influenced by a number of factors, including interest rates, inflation, capital flow, and money supply. The most common method to value currency is through exchange rates.
Detailed explanation-3: -The real exchange rate (RER) between two currencies is the product of the nominal exchange rate (the dollar cost of a euro, for example) and the ratio of prices between the two countries.
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