The price of a nation’s currency in terms of another currency is which of the following?

The price of a nation’s currency in terms of

Multiple choice — select the best answer

Aforeign interest rate
Bbalance of payments
Cexchange rate
Dforeign payment rate

✓ Correct answer: C. exchange rate The exchange rate is the price of a nation’s currency in terms of another currency. An exchange rate thus has two components, the domestic currency and a foreign currency, and can be quoted either directly or indirectly. In a direct quotation, the price of a unit of foreign currency is expressed in terms of the domestic currency. In an indirect quotation, the price of a unit of domestic currency is expressed in terms of the foreign currency.

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