[Solved] What is the primary function of the foreign exchange market? — Ans: To facilitate the exchange of one currency for another | Economic Awareness

Economic Awareness - Sectors of Indian Economy

What is the primary function of the foreign exchange market?

ATo regulate domestic interest rates

BTo facilitate the exchange of one currency for another

CTo control inflation through monetary policy

DTo set prices of goods and services in the economy

Step-by-Step Solution

Step 1: Identify the concept
The question tests the basic understanding of the foreign exchange market's role.
Step 2: Apply the concept
The foreign exchange market primarily facilitates the conversion of one currency into another for trade, investment, and other purposes. It does not regulate interest rates, control inflation, or set prices of goods.
Final Answer:
To facilitate the exchange of one currency for another → Option B
Quick Check:
Foreign exchange market function = currency exchange ✅

Quick Trick: Remember: Forex market = currency trading hub.

Common Mistakes:

MISTAKES

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