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The price to exchange one U.S. dollar for one unit of a foreign currency is called an exchange rate. The exchange rate of the U.S. dollar varies for different foreign currencies, which fluctuate daily based on a number of factors.
Evaluation of changes in the exchange rate on business. The effect of the exchange rate on business depends on several factors. 1. Elasticity of demand. If there is a depreciation in the value of the Pound, the impact depends on elasticity of demand.he effect of the exchange rate on business depends on several factors. 1. Elasticity of demand. If there is a depreciation in the value of the Pound, the impact depends on elasticity of demand.