Currency flows and exchange rates have a greater effect on trade than government monetary policies.

Question

Quizplus · Accepted Answer

Currency flows and exchange rates play a crucial role in determining the competitiveness of a country's exports and imports. Fluctuations in exchange rates can affect the affordability and demand for goods and services, which in turn impacts trade. While government monetary policies can influence exchange rates to some extent, currency flows are largely determined by market forces such as supply and demand for currencies. Therefore, currency flows and exchange rates have a greater impact on trade compared to government monetary policies.

Currency Flows and Exchange Rates Have a Greater Effect on Trade