(05.06 mc)
which of the following is the main cause of changes in foreign exchange rates?
types of resources in a country
supply and demand
a conversion proportion
imports and exports

Supply and Demand

Explanation
Aside from factors such as interest rates and inflation, the currency exchange rate is one of the most important determinants of a country's relative level of economic health. Exchange rates play a vital role in a country's level of trade, which is critical to most every free market economy in the world. For this reason, exchange rates are among the most watched, analyzed and governmentally manipulated economic measures. But exchange rates matter on a smaller scale as well: they impact the real return of an investor's portfolio. Here, we look at some of the major forces behind exchange rate movements.