---
entity_slug: computed_exchange_rate
evaluator: null
evaluated_at: '2026-02-23T05:02:01.037160'
overall_score: 4.2
scores:
- name: definition_precision
  value: 4.0
  max_value: 5.0
  rationale: The definition clearly distinguishes computed exchange rate from real
    exchange rate, specifying it's based on official mint standards assuming full
    legal weight of precious metal. The concept is precise and non-circular, though
    it could benefit from a more explicit mathematical formulation.
- name: source_grounding
  value: 5.0
  max_value: 5.0
  rationale: This concept is directly grounded in Smith's analysis in Book IV, Chapter
    3, where he explicitly discusses the distinction between computed and real exchange
    rates in the context of currency debasement and trade balance calculations. The
    entity accurately reflects Smith's theoretical framework.
- name: domain_placement
  value: 5.0
  max_value: 5.0
  rationale: The "Exchange" domain is perfectly appropriate, as this concept deals
    specifically with currency exchange mechanisms and the theoretical foundations
    of exchange rate calculation. It fits naturally within monetary and international
    trade theory.
- name: vsm_relevance
  value: 3.0
  max_value: 5.0
  rationale: This entity has moderate VSM relevance, potentially mapping to S4 (intelligence)
    as it represents a theoretical model for understanding environmental conditions
    affecting trade. However, it's primarily a measurement concept rather than a systemic
    function, making VSM placement somewhat forced.
- name: explanatory_value
  value: 4.0
  max_value: 5.0
  rationale: The entity provides significant explanatory value by illuminating the
    structural mechanism behind exchange rate discrepancies and why market rates diverge
    from theoretical calculations. It helps explain a key source of confusion in 18th-century
    trade balance analysis.
---

# Evaluation: Computed Exchange Rate

## definition_precision — 4.0 / 5.0

The definition clearly distinguishes computed exchange rate from real exchange rate, specifying it's based on official mint standards assuming full legal weight of precious metal. The concept is precise and non-circular, though it could benefit from a more explicit mathematical formulation.

## source_grounding — 5.0 / 5.0

This concept is directly grounded in Smith's analysis in Book IV, Chapter 3, where he explicitly discusses the distinction between computed and real exchange rates in the context of currency debasement and trade balance calculations. The entity accurately reflects Smith's theoretical framework.

## domain_placement — 5.0 / 5.0

The "Exchange" domain is perfectly appropriate, as this concept deals specifically with currency exchange mechanisms and the theoretical foundations of exchange rate calculation. It fits naturally within monetary and international trade theory.

## vsm_relevance — 3.0 / 5.0

This entity has moderate VSM relevance, potentially mapping to S4 (intelligence) as it represents a theoretical model for understanding environmental conditions affecting trade. However, it's primarily a measurement concept rather than a systemic function, making VSM placement somewhat forced.

## explanatory_value — 4.0 / 5.0

The entity provides significant explanatory value by illuminating the structural mechanism behind exchange rate discrepancies and why market rates diverge from theoretical calculations. It helps explain a key source of confusion in 18th-century trade balance analysis.
