An indirect exchange rate specifies the value of the currency in terms of what?

An indirect exchange rate expresses the value of a foreign currency in relation to a specific amount of the domestic currency, typically the U.S. dollar. In this context, option A is accurate because it indicates how many units of the foreign currency can be exchanged for one U.S. dollar. This means that if, for example, the indirect exchange rate of the euro is 1.20, it suggests that one U.S. dollar can be exchanged for 1.20 euros.

Understanding this context is crucial, as it helps one grasp the mechanics of currency exchange and how foreign currencies are valued relative to the U.S. dollar. In contrast, the other options either describe different concepts unrelated to the direct definition of an indirect exchange rate or involve broader measures that do not specifically specify the relationship between the foreign currency and the U.S. dollar.