As exchange rates change, they
A) change the relative purchasing power between countries.
B) can affect imports and exports between those two countries.
C) will affect the flow of funds between the countries.
D) All of the options are true.

Question

Quizplus · Accepted Answer

All of the given options are true. Exchange rates play a vital role in determining the relative purchasing power between countries, affecting imports and exports between those two countries, and eventually affect the flow of funds between them. Hence, option D is the best choice.

As Exchange Rates Change, They