GK
ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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____ represent the most widely used tool in international finance for measuring the average value of a currency relative to a number of other currencies.
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real exchange rates
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cross exchange rates
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exchange rate indexes
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nominal exchange rates
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Explanation:
Detailed explanation-1: -US dollar (USD) It is the number one most traded currency globally, accounting for a daily average volume of US$2.9 trillion. There are several reasons for its popularity. Firstly, the US is the world’s largest economy and a powerhouse in international trade.
Detailed explanation-2: -The nominal exchange rate is defined as the number of units of the domestic currency that can purchase a unit of a given foreign currency. The nominal effective exchange rate (NEER) is an unadjusted weighted average rate at which one country’s currency exchanges for a basket of multiple foreign currencies.
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