The Foreign Exchange Rate Is

question 48

Multiple Choice

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.

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Definitions:

Random Variations

Unpredictable fluctuations that affect data or processes, not attributable to any known cause.

Exponentially Smoothed Forecast

A method of forecasting that gives more weight to recent data points, using exponential smoothing to produce a smoothed time series.

Forecast Error

The difference between the actual value and the predicted value in a forecast, indicating the accuracy of the forecasting process.

Weighting Scheme

A method of assigning different weights or importance to various elements or criteria in order to calculate a composite score or make decisions.