Asked by Nakaila Lovett on Jul 17, 2024
Verified
The foreign exchange rate is:
A) an entry in the current account.
B) the price of a foreign good in the world market.
C) an entry in the capital account.
D) an entry in the balance of trade.
E) the cost of one currency in terms of another.
Foreign Exchange Rate
The price at which one currency can be exchanged for another currency in the foreign exchange market.
World Market
The global marketplace where goods, services, and financial products are bought and sold across borders.
- Gain insight into how exchange rates influence international business activities.
Verified Answer
GG
Geetha GanesanJul 21, 2024
Final Answer :
E
Explanation :
The foreign exchange rate is the cost of one currency in terms of another. It represents how much one currency is worth in terms of the other currency. It is used for international trade and investment, and affects the balance of trade and capital flows between countries. It is not an entry in the current account, capital account, or balance of trade, although it can be influenced by these factors. It also does not represent the price of a foreign good in the world market, although it can affect the price of imports and exports.
Learning Objectives
- Gain insight into how exchange rates influence international business activities.