What does an exchange rate tell you? a. how many products have been exchanged between two different countries b. the number of people in one country in comparison to another country c. how much one unit of currency is worth when converted to another currency d. the speed that people are buying a specific type of product

C. How much one unit of currency is worth when converted to another currency

Explanation:

An exchange rate gives an insight into how much a currency is worth on conversion to another currency. It is the relative worth of a currency when compared with another. For example, 1 US Dollar is equivalent to 360 Nigerian Naira. This means that the power of purchase of $1 is the same as the purchasing power of NGN 360.

Balance of payment, inflation, political stability, government's debt, recession etc are some of the factors that determine or affect exchange rates.

Population does not necessarily affect exchange rate neither does the speed at which people are buying a specific type of product. How many products have been exchanged between two different countries is called the balance of trade and not exchange rate.

Hence, the right option is C. How much one unit of currency is worth when converted to another currency

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