<!-- generated: provider=openrouter model=arcee-ai/trinity-large-preview:free date=2026-02-19 source=book-4-chapter-03 -->

# Computed Exchange Rate

## Definition

The theoretical exchange rate between two currencies calculated based on the official mint standards of each country, assuming coins contain their full legal weight of precious metal. This differs from the real exchange rate, which reflects the actual market value of debased or worn currency.

## Source Chapter

Book IV, Chapter 3

## Context

Part of Smith's analysis of why exchange rates can be misleading indicators of trade balances. He explains that computed exchange rates based on mint standards often diverge significantly from real exchange rates reflecting the actual condition of circulating currency.

## Economic Domain

Exchange

---
