The exchange rate at which demand for foreign currency becomes equal to its supply is called:

Unequal rate of exchange

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All of these

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Equilibrium exchange rate

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Equal rate of exchange

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Solution

The correct option is C
Equilibrium exchange rate

The equilibrium exchange rate is the exchange rate at which demand equals supply.

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Similar questions

What is the relationship between supply of foreign exchange and exchange rate?

Explain why the supply of a foreign currency rises in response to a rise in its exchange rate.

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