Which of the following statements concerning the effects of fluctuating exchange rates on companies competing in foreign markets is true?
A) Fluctuating exchange rates pose significant risks to a company's competitiveness in foreign markets.
B) The advantages of manufacturing goods in a particular country are largely unaffected by fluctuating exchange rates.
C) Companies that are manufacturing goods in a particular country and are exporting much of what they produce lose out when that country's currency grows weaker relative to the currencies of the countries that the goods are being exported to.
D) The advantages of manufacturing goods in a particular country improve when that country's currency grows stronger relative to the currencies of the countries where the output is being sold.
E) Domestic companies under pressure from lower-cost imports are hurt even more when their government's currency grows weaker in relation to the currencies of the countries where the imported goods are being made.

Question

Quizplus · Accepted Answer

Fluctuating exchange rates pose significant risks to a company's competitiveness in foreign markets as they affect the relative prices of goods and services, making them more expensive or less expensive depending on the exchange rate movements. This can result in reduced sales volume, lower profits, and decreased market share. The other options are inaccurate as they do not reflect the impact of exchange rate fluctuations on companies competing in foreign markets.

Which of the Following Statements Concerning the Effects of Fluctuating