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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.
The study was focused on finding out whether the Keynesian theory of balance of payments which points out that devaluation of exchange rate and price level will affect the Balance of trade which in the case of Keynesian theory is the most important account in the balance of payments is better option when applying fiscal and monetary policies to counter balance of payments imbalance in an open economy like, Iran.