In economics, an exchange rate describes: A. How quickly prices are rising in an international market.
B. The amount of currency available in fixed exchanges.
C. The total value of a country’s imports and exports.
D. How much one currency is worth compared to another.
The correct answer is: D. How much one currency is worth compared to another.
Explanation: An exchange rate indicates the value of one currency in terms of another. It tells you how much of one currency you need to spend to buy a unit of another currency. For example, if the exchange rate between the US dollar and the euro is 1.10, it means you need 1.10 US dollars to buy 1 euro. This is essential for international trade and finance.