Excerpt from Foreign Exchange Market Business & Economics Research Advisor, from the Library of Congress
An exchange-rate system is the set of rules established by a nation to govern the value of its currency relative to other foreign
currencies. The exchange-rate system evolves from the nation's monetary order, which is the set of laws and rules that
establishes the monetary framework in which transactions are conducted. When one currency is traded for another, a foreign
exchange market is established. The foreign exchange market or FX market is the largest market in the world. The amount of
cash traded exceeds the world's stock markets. Participants in the FX market include large commercial banks, central banks,
governments, multinational corporations and other financial markets and institutions.
What does the author mean by, "When one currency is traded for another, a foreign exchange market is established?
es -0)
A)
The amount of cash traded exceeds the world's stock markets.
B)
The foreign exchange market or FX market is the largest market in the
world.
When individuals and companies want to buy products from another
country, then they need to insure the basis of the market is gold.
When trade occurs between two countries that use different currencies, a
market springs up to allow one country to exchange one type of currency
for another at a certain rate.
D)