Question

What is a currency exchange rate?

Answer 1

The answer is C. I just got it correct

Answer 2

Short answer: C

Currency exchange rates are determined by the value set in the market place. It is a very complex procedure and depends on many ways of doing it. Ordinary citizens do not have to do anything to experience the effects of a currency rate change. So A is incorrect. It has nothing to do with over payment.

B is a good answer and it is in fact true. Those living in a country will feel the effects of a currency inflation when they try to buy something from a country whose currency is quite strong. That is probably your second best answer. Another answer is more general.

C. This is actually the answer. I live in Canada. Our dollar is worth 0.78 American dollars. It has all but made travel impossible in the United States. We pay 1/3 more for everything. Try booking a motel and not be horrified by what your credit card says the payment is.

D. Currency fluctuations can be part of the exchange rate, but that is not the definition for an exchange rate. 

Comment
B and D are pretty close answers, but C is actually what you want.

C <<<<< Answer