alleryStart learning →What is an exchange rate?
AThe tax charged on goods entering a country
BThe price of one currency in terms of another
CThe share of trade settled in a single currency
DThe cost of shipping goods between two nations
Answer & Solution
Correct answer: B. The price of one currency in terms of another
1. An exchange rate is the price of the currency of one country in terms of another.
2. It is one of the key measures of international trade alongside the two balances.
3. A tax on goods entering a country is a tariff rather than an exchange rate.
4. Shipping costs and settlement shares are separate measures entirely.
_Source: OpenStax Introduction to Business (CC BY 4.0), Ch 3 "Competing in the Global Marketplace", section 3.1 Global Trade in the United States_
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