Which option correctly defines foreign exchange?

Multiple choice question for Basic of Economics. Select an option, then review the explanation below.

Show Answers

International financial transactionsNegotiable instruments issued in one nation and payable in a different nationBoth international financial transactions and negotiable instrumentsNeither of the above

Explanation

Foreign exchange refers to both international financial transactions and negotiable instruments that are drawn in one country and payable in another. Therefore, both options A and B collectively describe foreign exchange.

Practice related questions from the same subject.

1.Which of the following best describes deflation?
2.Under what condition can two nations benefit from engaging in international trade?
3.Which of the following represents a legitimate form of currency?
4.Which political ideology is best summarized by the phrase, "From each according to his ability, to each according to his needs"?
5.Which type of currency experiences a decline in its exchange rate due to a continuous balance of payments deficit?

Which option correctly defines foreign exchange?

Explanation

More Basic of Economics MCQs