The equilibrium value of a currency is the value:
A)at which the amount of the currency that is demanded will equal the amount of the currency that is supplied.
B)at which the currency is most often found.
C)of the currency that has been maintained for at least 30 days.
D)at which the country issuing the currency will issue additional currency.

Question

Quizplus · Accepted Answer

The equilibrium value of a currency is determined by the intersection of demand and supply in the foreign exchange market. At this point, the quantity of the currency demanded by foreign buyers will exactly equal the quantity that is supplied by domestic sellers. This point of equilibrium establishes the exchange rate of the currency relative to other currencies.

The Equilibrium Value of a Currency Is the Value