Which of the Following Is the Best Definition of the Exchange

question 65

Multiple Choice

Which of the following is the best definition of the exchange rate?

• A) The price at which the government translates the currency of another country
• B) The price at which imports are traded for imports in the stock exchange
• C) The price of one currency in terms of another in the foreign exchange market
• D) None of these

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Definitions:

Comparative Advantage

The ability of an entity to produce goods or services at a lower opportunity cost than others, leading to more efficient trade and production distribution.

Gains from Specialization

The increased efficiency and output that result when individuals or entities focus on specific tasks or activities they perform best.

Exchange Rates

The worth of one currency in relation to another, establishing how much of one currency can be exchanged for another.

Exchange Rate

The worth of a particular currency when converted into a different currency.