Currency and Exchange Rates

What is an exchange rate?

• The rate at which goods are exchanged between two countries

• The price of one nation's currency in terms of another currency

• The price of goods in terms of a foreign currency

• When a nation's balance of trade is in either a surplus or deficit

According to the table, what is the Euro equivalent of 1 USD? (a)  

• 1 Euro

• 0.76 Euros

• 0.63 Euros

• 0.97 Euros

Why do changing exchange rates help one country and hurt the other?

• One side loses purchasing power and the other gains it

• Takes money away from one side and gives it to the other

• Causes war between the two countries

• One country's government introduces tariffs to protect local industries

What is the increase in the value of a currency? (a)  

• Exchange rate

• Recession

• Depreciation

• Appreciation

The price of one country's currency in terms of another country's currency.

• Tariff

• Duty Tax

• Exchange Rate

• Fiscal Policy

The price of one nation's currency in terms of another country's currency is called

• fiscal policy

• monetary policy

• the exchange rate

• the discount rate

What is the US dollar primarily considered?

• Fiat Money

• Fiat Currency

• Gold-backed Currency

• Silver-backed Currency

Salt, gold, silver, and Wampum are examples of

• Fiat currency

• Commodity backed currency

• Commodity currency

• Barter Sytem

What does it mean when an economist says a currency is stronger?

• It can be exchanged for more of a lesser foreign currency

• It can be converted to prices in any currency

• There a few things it could buy

• It will buy fewer foreign goods

What is a decrease in the value of a currency? (a)  

• Appreciation

• Depreciation

• Inflation

• Absolute advantage