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Sati [7]
3 years ago
8

Exchange rates can indicate economic health by

Social Studies
1 answer:
Talja [164]3 years ago
6 0

<u>The correct answers are the following:</u>

  • showing the relative strength of different nations’ currencies.  
  • examining spending patterns across nations and continents.

The exchange rate provides the amount of one currency that has to be provided (price) in order to obtain one unit of a different currency.

Exchange rates are mostly fixed by the forces of supply and demand, hence, depending on consumer needs and preferences and of their relative abudance or scarcity. Threfore, <u>the final exchange rate (price) reached in the market shows the strength of a currency against a foreign one. </u>

Moreover, demand and supply of currencies arise due to international commercial activities that require traders to exchange their money into a different currencies if they want to purchase/sell abroad. Therefore, <u>exchange rates (prices) reached are also dependent on spending patterns in the different countries, </u>more specifically on the streams of exports and imports.  

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