In general, trade flows between countries respond to:
A) changes in the nominal exchange rate.
B) changes in the real exchange rate.
C) changes in interest rates.
D) changes in the real rate of interest.
E) changes in political factors.

Question

Quizplus · Accepted Answer

Trade flows between countries are primarily influenced by changes in the real exchange rate, which affects the relative prices of goods and services between countries, thereby impacting import and export levels.

In General, Trade Flows Between Countries Respond To