Which of the following statements is correct?
I. The exchange rate is a price.
II. The exchange rate is different from other prices because it is NOT determined by supply and demand.
A) only I
B) neither I nor II
C) I and II
D) only II

Question

Quizplus · Accepted Answer

The exchange rate is a price that represents the ratio at which one currency can be exchanged for another. It is determined by the forces of supply and demand in the foreign exchange market, just like other prices. Therefore, statement II is incorrect.

Which of the Following Statements Is Correct