Final answer:
The term for the rate at which one currency is converted into another is the exchange rate, which is essential for international economic comparison and financial transactions.
Step-by-step explanation:
The term that refers to the rate at which one currency is converted into another is the exchange rate. This is fundamentally the price of one currency expressed in terms of another. Exchange rates are utilized as a 'common denominator' when comparing international economic indicators like GDP, or when conducting trades and investments across nations with different currencies. Exchange rates can be presented as the amount of one country's currency required to buy a single unit of another's, such as the number of Japanese yen needed to purchase one British pound, or vice versa.
These rates are determined by the supply and demand dynamics in the foreign exchange markets, where various participants, including businesses, governments, and individuals, play a part. A country’s monetary policy and central bank can also influence these rates through interventions or by letting the market dictate the flow. Thus, exchange rates are a crucial tool for understanding and engaging in the global economy.