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Answered

How do exchange rates affect international trade?

A. They determine how much a country can import for a certain amount of currency.
B. They prevent developing countries from trading with developed countries.
C. They encourage free trade between countries that once had barriers to trade.
D. They force a country to adjust its import rates to match its export rates.



Answer :

GinnyAnswer

Final answer:

Exchange rates impact international trade by affecting import and export prices, influencing trade flows in various ways.


Explanation:

Exchange rates affect international trade in several ways. When a currency is strong, imports increase as foreign goods become cheaper, while exports decrease as domestic goods appear more expensive. Additionally, factors such as trade barriers, consumer preferences, and productivity influence exchange rates and trade flows.


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