The Exchange Rate Is

question 84

Multiple Choice

The exchange rate is:

• A) the rate at which goods will exchange for each other in the international market.
• B) the number of units of one currency required in exchange for one unit of another currency.
• C) set by the International Trade Commission.
• D) established by the ratio of the values of gold to silver.
• E) set by each individual country.

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Definitions:

Short Run

An interval in economic studies where a minimum of one production element remains constant and is unalterable.

Variable Costs

Expenses that change in proportion to the activity of a business.

Short Run

A time period in economics during which at least one input, such as plant size, is fixed and cannot be altered.

Profit Maximization

The procedure through which a business identifies the pricing and production volume that yields the highest earnings.