Question

For this table, the reference currency is the _______

Answer 1

For this table, the reference currency is the Euro.

• The reference currency means that the euro is the base unit, the table shows how much is one euro worth in the different currencies. This can be observed on the first row of the second column where it says (euro= 1)

The exchange rate of the euro to the US dollar and most other currencies is determined by supply and demand.

• Most countries have a flexible exchange rate. This means that the government does not have a fixed exchange rate. With a fixed exchange rate the government compromises to give a given amount of money in exchange for one unit of a specific currency. Whenever, there is a flexible exchange rate, the price of another currency is determined by the incoming and outgoing capital.

According to the chart, one euro would buy 1.2149 Swiss francs.

• This can be found in the fourth row and second column of the chart.
• 1 euro = 1.2149 Swiss francs

It would cost 1.28 US dollars to buy one euro.

• 1 euro = 1.28 US dollars
• This can be found in the last row and second column of the chart.

Answer 2

In order the answers are:

B- Euro

A- supply and demand

B- 1.2149

A- 0.84

Hope this helps!