An exchange rate is:

A) the rate at which goods are traded between countries.
B) the rate at which the central bank of a country gives loans to commercial banks.
C) the rate at which commercial banks give loans to individuals.
D) the price of one currency in terms of another.
E) the price at which one good trades for another.

Exchange Rate

The rate at which one currency can be exchanged for another currency.

Commercial Banks

Financial institutions that accept deposits, offer checking and savings accounts, and provide loans, thereby playing a crucial role in the financial system.

Central Bank

Is the primary financial institution of a country, responsible for issuing currency, managing the money supply, regulating banks, and implementing monetary policy to achieve economic stability.