AAN EXCHANGE RATE IS A RATIO THAT DESCRIBES HOW MANY UNITS OF ONE...
49) A
An exchange rate is a ratio that describes how many units of one currency you can buy per unit of another
currency. Whatever currency in which the quote is made belongs in the numerator while the denominator is
always one unit of the currency you are interested in. A currency appreciates when it rises in value relative
to another foreign currency and likewise a currency deprecitates when it falls in value relative to another
foreign currency. Appreciation of a currency makes that country's goods more expensive to residents of
other countrise while a depreciation makes a country's goods more attractive to foreign buyers.