POST COLD WAR WORLD
INTEGRATION OF EUROPE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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to create demand for goods and services
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to lower product prices for consumers
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to allow for trade between countries
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to reduce production costs for businesses
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Detailed explanation-1: -Foreign exchange markets serve an important function in society and the global economy. They allow for currency conversions, facilitating global trade (across borders), which can include investments, the exchange of goods and services, and financial transactions.
Detailed explanation-2: -The foreign exchange markets play a critical role in facilitating cross-border trade, investment, and financial transactions. These markets allow firms making transactions in foreign currencies to convert the currencies or deposits they have into the currencies or deposits they want.
Detailed explanation-3: -The exchange rate plays an important role in a country’s trade performance. Whether determined by exogenous shocks or by policy, the relative valuations of currencies and their volatility often have important repercussions on international trade, the balance of payments and overall economic performance.
Detailed explanation-4: -An exchange rate system, also called a currency system, establishes the way in which the exchange rate is determined, i.e., the value of the domestic currency with respect to other currencies. Choosing the currency system is a pivotal element of the economic policy adopted by a country’s government.