Why do countries have different exchange rates, and what about the economy makes them go up or down?

Question

Why do countries have different exchange rates, and what about the economy makes them go up or down?

In: Economics

Answer 1

Goods and services. How much a person can purchase with their country’s money. I.e. on the US how much of a product can we buy with a single US dollar. Then we compare how much we can buy with a Euro or GBP, Yen, Rupee, Won, etc. It’s all about what it’s worth and/or if its backed by something like gold.