In some developing countries,different exchange rates apply to different categories of transaction,and therefore,_____.
A)the local currency is not easily convertible to foreign currency
B)the local currency is very easily convertible to foreign currency
C)the prices of foreign goods fluctuate widely in the domestic markets
D)the prices of domestic goods fluctuate widely in the foreign markets
E)domestic investors are more inclined to invest in foreign assets

Question

Quizplus · Accepted Answer

Different exchange rates apply to different categories of transaction in developing countries because of government regulations and restrictions. This makes the local currency not easily convertible to foreign currency, as certain transactions may have a higher exchange rate than others. This can make it challenging for foreign investors to do business in these countries and can also limit the ability of domestic businesses to expand internationally.

In Some Developing Countries,different Exchange Rates Apply to Different Categories