Final answer:
Internal vs. External Exchange is based on geographic location. it is considered external exchange. The distinction between internal and external exchange is important because it can affect factors such as currency rates, customer preferences, regulatory compliance, and market demand.
Step-by-step explanation:
The concept of internal vs. external exchange is based on geographic location. Internal exchange refers to transactions that occur within a country's borders, while external exchange involves transactions between different countries. For example, if a company in the United States sells its products to customers in the same country, it is considered internal exchange.
On the other hand, if the company sells its products to customers in another country, it is considered external exchange. The distinction between internal and external exchange is important because it can affect factors such as currency rates, customer preferences, regulatory compliance, and market demand.