what is berrier on foreign trade
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The variation in the value of the currency is the main reason behind foreign exchange affecting trade.
Let us assume that there are two ctrading countries A and B. Country A imports a particualr good from B and pays B in certain currency for example US dollar. If the value of US dollar falls then the good will be more expensive.
The expensive good might loose its demand and thus less import should ber done by A from B to maintain the Balance of payments and other parameters in equlibrium.
Let us assume that there are two ctrading countries A and B. Country A imports a particualr good from B and pays B in certain currency for example US dollar. If the value of US dollar falls then the good will be more expensive.
The expensive good might loose its demand and thus less import should ber done by A from B to maintain the Balance of payments and other parameters in equlibrium.
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