Final answer:
The process in which homologous chromosomes exchange genetic material during meiosis is called crossing over, also known as recombination, and it enhances genetic diversity.
Step-by-step explanation:
The term used to describe homologous chromosomes exchanging genetic material during meiosis is crossing over. This process, also known as recombination, occurs specifically during prophase I of meiosis I. Homologous chromosomes line up in pairs, forming a tetrad configuration. During this phase, non-sister chromatids of homologous chromosomes can swap segments of genetic material, leading to new combinations of genes on each chromosome and contributing significantly to genetic diversity.