A Weak Home Currency May Not Be a Perfect Solution

question 21

Multiple Choice

A weak home currency may not be a perfect solution to correct a balance of trade deficit because:

• A) it reduces the prices of imports paid by local companies.
• B) it increases the prices of exports by local companies.
• C) it prevents international trade transactions from being prearranged.
• D) foreign companies may reduce the prices of their products to stay competitive.

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Definitions:

Contemporary Organisations

Modern entities that are characterized by their adaptive strategies, innovative approaches, and responsiveness to changes.

Operating Environment

The external conditions and factors that affect an organization’s operations, including economic, regulatory, technological, and demographic influences.

Above-average Returns

Financial gains that exceed the benchmark or average returns in a given market or industry.

Excessive Profits

Earnings that significantly exceed the norm for a industry or market, often viewed critically in terms of business ethics or competition fairness.