Which of the Following Statements About Fluctuating Exchange Rates and the Related

question 12

Multiple Choice

Which of the following statements about fluctuating exchange rates and the related effects on companies competing in foreign markets is true?

• A) Fluctuating exchange rates pose significant risks to a company's competitiveness in foreign markets.
• B) The advantages of manufacturing goods in a particular country are largely unaffected by fluctuating exchange rates.
• C) Companies that are manufacturing goods in a particular country and are exporting much of what they produce lose out when that country's currency grows weaker relative to the currencies of the countries that the goods are being exported to.
• D) The advantages of manufacturing goods in a particular country improve when that country's currency grows stronger relative to the currencies of the countries where the output is being sold.
• E) Domestic companies under pressure from lower-cost imports are hurt even more when their government's currency grows weaker in relation to the currencies of the countries where the imported goods are being made.

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Definitions:

Bromine

A halogen element with the symbol Br and atomic number 35, known for its red-brown color and use in flame retardants and other chemicals.

Hydrogens

Atoms that consist of one proton and, in most cases, one electron, forming the most abundant chemical substance in the universe.

Equilibrium Constant

A number that expresses the relationship between the concentrations of products and reactants of a reaction at equilibrium under given conditions.

ΔG°

The standard Gibbs free energy change for a reaction, indicating the spontaneity of the process under standard conditions.