Variability in Exchange Rates of Currencies Used in International Trade

question 211

Multiple Choice

Variability in exchange rates of currencies used in international trade

• A)causes a complete breakdown of trade.
• B)renders the theory of gains from trade null in practice.
• C)brings with it a host of complications in trade policy.
• D)has no impact on trade.

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Definitions:

Causes and Effects

A relationship between two phenomena where one (the cause) directly results in the other (the effect).

Experiments

A scientific procedure undertaken to make a discovery, test a hypothesis, or demonstrate a known fact.

Research Methods

The systematic techniques and tools used to gather, analyze, and interpret data in order to draw conclusions.

Positively Correlated

A relationship between two variables where if one variable increases, the other one also increases, or if one decreases, the other does as well.