Final answer:
Statement 4 is false; exchange rates are not always fixed and can fluctuate due to various factors, including supply and demand.
Step-by-step explanation:
The student has provided several statements about exchange rates and is asking which one is false. After analyzing the statements, it is clear that statement 4, claiming that the exchange rate is fixed and does not change, is the false one.
Exchange rates are indeed the price of one currency in terms of another, and they determine the relative value of currencies. These rates can fluctuate due to various factors, including changes in supply and demand, government policy, and economic indicators. Unlike what statement 4 suggests, exchange rates are not always fixed but can also be flexible and subject to market movements.
Only in a fixed exchange rate system, usually maintained by a country's central bank, is the exchange rate kept constant relative to a major currency or a basket of currencies. However, even in these systems, the fixed rate can be adjusted by the central bank.