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Questions and Answers
Currency can be used to purchase goods and services in a market.
Currency can be used to purchase goods and services in a market.
True (A)
The exchange rate determines what one country's currency is worth in terms of another country's currency.
The exchange rate determines what one country's currency is worth in terms of another country's currency.
True (A)
An exchange rate of 58.27 rubles to the US dollar means 58.27 US dollars are equal to 1 ruble.
An exchange rate of 58.27 rubles to the US dollar means 58.27 US dollars are equal to 1 ruble.
False (B)
Money from one country must be converted to the currency of another country for international trade.
Money from one country must be converted to the currency of another country for international trade.
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Countries do not need a currency exchange system for international trade.
Countries do not need a currency exchange system for international trade.
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Study Notes
Currency
- Currency is a medium of exchange with a specific value used to purchase goods and services.
International Trade and Currency Exchange
- Countries use different currencies, leading to the need for currency exchange in international trade.
- To purchase goods in another country, the buyer's currency must be converted to the seller's currency.
Exchange Rate
- The exchange rate represents the value of one currency relative to another.
- An exchange rate of 58.27 Russian rubles to the US dollar means 1 US dollar is equal to 58.27 Russian rubles.
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