Exchange Rate in the Economy

Basic Exchange Rate

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Question

Which of the following is the basic exchange rate in the economy?

Answers

Explanations

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A. B. C. D.

B

The basic exchange rate in the economy is not among the options provided in the question. The exchange rate refers to the value of one currency in relation to another. Therefore, the correct answer is none of the above.

To provide further explanation, let's briefly define the options provided in the question:

A. External rate of return: This is the rate of return earned on investments made outside of a particular country.

B. Real rate of return: This is the rate of return adjusted for inflation.

C. Rate of return on assets: This is the rate of return earned on a particular asset or investment.

D. Net present value rate of return: This is the rate of return based on the present value of expected future cash flows.

None of these options are directly related to the exchange rate, which is determined by a variety of economic factors, such as interest rates, inflation rates, government policies, and trade balances.

In conclusion, the correct answer to the question is none of the above, as none of the options provided represent the basic exchange rate in the economy.