BUSINESS ADMINISTRATION
FINANCIAL MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Factor affecting international trade flow
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Cost of labor
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Inflation
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Exchange rate
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Expansion
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Explanation:
Detailed explanation-1: -These include factor endowments and productivity, trade policy, exchange rates, foreign currency reserves, inflation, and demand.
Detailed explanation-2: -Changes in currency exchange rates affect international trade by increasing or decreasing exports and imports. A strong domestic currency will cause exports to decrease and imports to increase. As exchange rates decrease, exports rise and imports go down.
Detailed explanation-3: -An exchange rate is a relative price of one currency expressed in terms of another currency (or group of currencies). For economies like Australia that actively engage in international trade, the exchange rate is an important economic variable.
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