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Foreign exchange rate means the rate at which the currency of one country can be traded for
- a)The currency of any other country as determined by the International Monetary Fund
- b)US dollar, which is the strongest currency in any foreign exchange market
- c)A fixed basket of currencies consisting of Dollar, Yen, Euro and Pound
- d)The currency of any other country in the foreign exchange market
Correct answer is option 'D'. Can you explain this answer?
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Foreign exchange rate means the rate at which the currency of one coun...
The correct answer is D asForeign exchange rate means the rate at which the currency of one country can be traded for The currency of any other country in the foreign exchange market.
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Foreign exchange rate means the rate at which the currency of one coun...
Introduction:
Foreign exchange rate refers to the rate at which the currency of one country can be traded for the currency of another country in the foreign exchange market. It is an important concept in international trade and finance, as it determines the value of one currency relative to another. There are different factors that influence foreign exchange rates, including interest rates, inflation, political stability, and market speculation.
Explanation:
The correct answer to the given question is option 'D', i.e., the currency of any other country in the foreign exchange market. Let's understand why this is the correct answer:
1. Definition of foreign exchange rate:
The foreign exchange rate is the rate at which one currency can be exchanged for another currency in the foreign exchange market. It represents the value of one currency relative to another.
2. Foreign exchange market:
The foreign exchange market is a decentralized market where currencies are bought and sold. It operates 24 hours a day, 5 days a week, and is the largest financial market in the world. In this market, participants can trade one currency for another at the prevailing exchange rate.
3. Currency pairs:
Currencies are always traded in pairs in the foreign exchange market. Each currency pair consists of a base currency and a quote currency. The base currency is the currency being bought or sold, while the quote currency is the currency used to buy or sell the base currency. For example, in the currency pair USD/EUR, the base currency is the US dollar and the quote currency is the euro.
4. Exchange rate determination:
Foreign exchange rates are determined by the forces of supply and demand in the foreign exchange market. When there is a high demand for a currency, its value increases relative to other currencies, leading to an appreciation in its exchange rate. Conversely, when there is a low demand for a currency, its value decreases, leading to a depreciation in its exchange rate.
5. Role of market participants:
Market participants, such as banks, financial institutions, and individual traders, play a crucial role in determining foreign exchange rates. They buy and sell currencies based on their expectations of future exchange rate movements, as well as economic and political factors that may impact currency values.
Conclusion:
In conclusion, the correct answer to the given question is option 'D' because foreign exchange rates represent the rate at which the currency of one country can be traded for the currency of any other country in the foreign exchange market. The foreign exchange market operates based on the forces of supply and demand, and market participants play a significant role in determining exchange rates.
Foreign exchange rate refers to the rate at which the currency of one country can be traded for the currency of another country in the foreign exchange market. It is an important concept in international trade and finance, as it determines the value of one currency relative to another. There are different factors that influence foreign exchange rates, including interest rates, inflation, political stability, and market speculation.
Explanation:
The correct answer to the given question is option 'D', i.e., the currency of any other country in the foreign exchange market. Let's understand why this is the correct answer:
1. Definition of foreign exchange rate:
The foreign exchange rate is the rate at which one currency can be exchanged for another currency in the foreign exchange market. It represents the value of one currency relative to another.
2. Foreign exchange market:
The foreign exchange market is a decentralized market where currencies are bought and sold. It operates 24 hours a day, 5 days a week, and is the largest financial market in the world. In this market, participants can trade one currency for another at the prevailing exchange rate.
3. Currency pairs:
Currencies are always traded in pairs in the foreign exchange market. Each currency pair consists of a base currency and a quote currency. The base currency is the currency being bought or sold, while the quote currency is the currency used to buy or sell the base currency. For example, in the currency pair USD/EUR, the base currency is the US dollar and the quote currency is the euro.
4. Exchange rate determination:
Foreign exchange rates are determined by the forces of supply and demand in the foreign exchange market. When there is a high demand for a currency, its value increases relative to other currencies, leading to an appreciation in its exchange rate. Conversely, when there is a low demand for a currency, its value decreases, leading to a depreciation in its exchange rate.
5. Role of market participants:
Market participants, such as banks, financial institutions, and individual traders, play a crucial role in determining foreign exchange rates. They buy and sell currencies based on their expectations of future exchange rate movements, as well as economic and political factors that may impact currency values.
Conclusion:
In conclusion, the correct answer to the given question is option 'D' because foreign exchange rates represent the rate at which the currency of one country can be traded for the currency of any other country in the foreign exchange market. The foreign exchange market operates based on the forces of supply and demand, and market participants play a significant role in determining exchange rates.
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Foreign exchange rate means the rate at which the currency of one country can be traded fora)The currency of any other country as determined by the International Monetary Fundb)US dollar, which is the strongest currency in any foreign exchange marketc)A fixed basket of currencies consisting of Dollar, Yen, Euro and Poundd)The currency of any other country in the foreign exchange marketCorrect answer is option 'D'. Can you explain this answer?
Question Description
Foreign exchange rate means the rate at which the currency of one country can be traded fora)The currency of any other country as determined by the International Monetary Fundb)US dollar, which is the strongest currency in any foreign exchange marketc)A fixed basket of currencies consisting of Dollar, Yen, Euro and Poundd)The currency of any other country in the foreign exchange marketCorrect answer is option 'D'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Foreign exchange rate means the rate at which the currency of one country can be traded fora)The currency of any other country as determined by the International Monetary Fundb)US dollar, which is the strongest currency in any foreign exchange marketc)A fixed basket of currencies consisting of Dollar, Yen, Euro and Poundd)The currency of any other country in the foreign exchange marketCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Foreign exchange rate means the rate at which the currency of one country can be traded fora)The currency of any other country as determined by the International Monetary Fundb)US dollar, which is the strongest currency in any foreign exchange marketc)A fixed basket of currencies consisting of Dollar, Yen, Euro and Poundd)The currency of any other country in the foreign exchange marketCorrect answer is option 'D'. Can you explain this answer?.
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