Because of international time lags between ordering and the receipt of goods, a depreciation of a currency:
A) will not change import or export volumes for a time, since prices on orders already placed cannot be renegotiated.
B) will immediately change import and export volumes, because buyers and sellers always include an opt-out clause.
C) will affect import and export volumes in third countries not party to the particular transaction.
D) will never change import or export volumes.

Question

Quizplus · Accepted Answer

International trade transactions often involve long time lags between the ordering of goods and their delivery. This means that even if the currency of one of the countries involved in the transaction depreciates, the prices on orders already placed cannot be renegotiated. Therefore, a depreciation of a currency will not immediately change import or export volumes, and the effects may only be felt in the long term, once new orders are placed.

Because of International Time Lags Between Ordering and the Receipt