What is the term for the value of one country's currency in terms of another currency?

What is the term for the value of one country's currency in terms of another currency?

• A. Ethics
• B. Exchange rate
• C. Economic growth
• D. Special interest group (SIG)

Answer: (B)

Exchange rate is the term that describes how much one country's currency is worth in terms of another currency. It shows how many units of a domestic currency are needed to buy a unit of foreign currency (or vice versa) and is the key measure businesses use to price cross-border transactions, assess competitiveness, and manage costs. This rate can move with market forces or be set by governments, and it influences imports, exports, inflation, and overall economic activity. Other options refer to different concepts entirely (ethics, economic growth, or special interest groups), so they don’t fit.

Exchange rate is the term that describes how much one country's currency is worth in terms of another currency. It shows how many units of a domestic currency are needed to buy a unit of foreign currency (or vice versa) and is the key measure businesses use to price cross-border transactions, assess competitiveness, and manage costs. This rate can move with market forces or be set by governments, and it influences imports, exports, inflation, and overall economic activity. Other options refer to different concepts entirely (ethics, economic growth, or special interest groups), so they don’t fit.