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Answer to Question #83497 in Microeconomics for Nata
Question #83497
Explain how the foreign exchange value of a currency is determined in a free market.
Expert's answer
The foreign exchange value of a currency in a free market is determined by demand and supply. For example, when there is a high demand for the $ and the supply is low the prices will go up. Therefore, when exchanging the $ against another currency the dollar will be high.
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