Variability in exchange rates of currencies used in international trade
A)causes a complete breakdown of trade.
B)renders the theory of gains from trade null in practice.
C)brings with it a host of complications in trade policy.
D)has no impact on trade.

Question

Quizplus · Accepted Answer

Variability in exchange rates of currencies used in international trade poses challenges in determining trade policies, as it impacts the competitiveness of different countries' goods and services. It also increases uncertainty for businesses engaging in international trade. However, it does not cause a complete breakdown of trade, nor does it render the theory of gains from trade null in practice.

Variability in Exchange Rates of Currencies Used in International Trade