Ultimately, exchange rates are determined by
A)the lending of foreign national banks.
B)the buying of foreign exchange traders.
C)the forces of supply and demand.
D)each country via their monetary policy only.

Question

Quizplus · Accepted Answer

Exchange rates are primarily determined by the forces of supply and demand in the foreign exchange market. Factors such as economic performance, political stability, interest rates, and government policies can influence supply and demand for a particular currency, which in turn affects its exchange rate. While monetary policy can influence exchange rates to some extent, it is not solely responsible for determining them.

Ultimately, Exchange Rates Are Determined by