Question

What is the definition of exchange rate?

1) The rate at which one currency can be exchanged for another
2) The rate at which goods and services are exchanged between countries
3) The rate at which stocks and bonds are traded on the stock market
4) The rate at which interest is charged on a loan

Answer 1

An exchange rate is the rate at which one currency can be exchanged for another. It represents the value of one currency in terms of units of another currency and is determined by the forces of supply and demand.

Step-by-step explanation:

An exchange rate is the rate at which one currency can be exchanged for another. It is a price that represents the value of one currency in terms of units of another currency. The exchange rate is determined by the forces of supply and demand in the foreign exchange market.