Which of the following is/are significance of foreign exchange? It is used to denote the rate at which…
Foreign exchange denotes the rate at which different national monetary units are exchanged (A), provides the mechanism through which international payments are liquidated…
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Which of the following is/are significance of foreign exchange?
- It is used to denote the rate at which different monetary units are exchanged.
- It is a process through which international payments are liquidated by different countries.
- It indicates the rate of sale and purchase of foreign currency.
- It is a process through which goods are purchased or sold in a domestic country.
Answer and explanation
Correct answer B
Foreign exchange denotes the rate at which different national monetary units are exchanged (A), provides the mechanism through which international payments are liquidated across countries (B), and indicates the buying and selling rates of foreign currency (C). Domestic transactions within a single country (D) do not involve foreign exchange. Thus, A, B, C only is correct.
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UGC NET Management