Question

The nominal exchange rate

a) is the difference between the interest rate in one country and the interest rate in another country.
b) the rate at which a bond may be exchanged for currency.
c) the rate at which a stock may be exchanged for currency.
d) the price of one country's currency in terms of another's.

Answer 1

Answer: D: the price of one country's currency in terms of another's.

Explanation: the number of units of a local currency required to exchange for another number of units of a foreign currency is called the nominal exchange rate.

For example, if £1 = $1.5, it means that one pound is required to exchange for two American dollar.