One of the big risks of competing in foreign markets is:
A) the extent to which the advantages of exporting goods from a particular country can be wiped out when fluctuating exchange rates result in that country's currency growing much weaker relative to the currencies of the countries to which the goods are being exported.
B) whether the economies of foreign countries will continue to grow at double-digit rates.
C) the fact that some countries have lower wage rates than others.
D) the potential for local government officials to reduce tariffs on the imports of its goods into their country.
E) the extent to which the advantages of manufacturing goods in a particular country can be wiped out when fluctuating exchange rates result in that country's currency growing stronger relative to the currencies of the countries where the output is being sold.

Question

Quizplus · Accepted Answer

Fluctuating exchange rates can make a country's currency stronger, which can increase the cost of goods manufactured there when sold in foreign markets, potentially wiping out competitive advantages.

One of the Big Risks of Competing in Foreign Markets