Suppose a firm imports goods from Europe and the import price is denominated in euros, then ________.

Question

Quizplus · Accepted Answer

The importer bears foreign exchange risk as they will need to convert their domestic currency into euros to pay for the imports, and any changes in the exchange rate between the two currencies can affect the cost of the imports. The exporter and Central Bank do not have a direct foreign exchange risk in this scenario.

Suppose a Firm Imports Goods from Europe and the Import