Business, 24.03.2020 21:39 xmhllo

When a nation is economically integrated with trading partners, fixed exchange rates: Group of answer choices would be the best choice if that nation became the dominant nation in the transactions. would be very harmful to the dynamic nature of trade. would be adequate but have the disadvantage of discouraging trade because of uncertainty. could promote integration and economic efficiency by keeping transaction costs low.

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When a nation is economically integrated with trading partners,fixed exchange rates could promote integration and economic efficiency by keeping transaction costs low

Explanation:

The exchange rate is the value of a currency in terms of another. When exchange rates fluctuate, it creates uncertainty in trade. For example, when a country's currency depreciates, its exports are cheaper but imports are expensive. On the other hand, when its currency appreciates, exports are expensive but imports are cheaper. Thus, countries are unaware of what might happen and how their currency will affect them in the future which can deter them from trading. Therefore, they are unable to capitalize on comparative and absolute advantage nature of economies.

For example, Country A may have competitive advantage in the production of wheat. It can produce and sell at a lower rate than its neighboring country, Country B. However, if its currency appreciates, it makes exports expensive and transaction costs being higher, which leads to a fall in the trade and both countries being negatively impacted. Country A would have lost export revenue whilst country B would have to produce its wheat at an expensive cost.

When exchange rates are fixed, these countries would not have to worry about exchange rate fluctuations and hence can integrate and trade efficiently while keeping transaction costs low.

Answer from: Quest

whole quiz

1. the sum of all activities involved in getting high-quality products into the marketplace

2.operations

3. the principle of looking at the supply chain as a whole in order to improve the overall flow through the system.

4. produced; performed

5. activities producing tangible products, such as radios, newspapers, buses, and textbooks.

6. activities producing intangible and tangible products, such as entertainment, transportation, and education.

7. customer focus

8. analyzing a competitor's products to identify desirable improvements

9. the systematic direction and control of the processes that transform resources into finished projects that create value for and provide benefits to consumers.

10. operation management.

your welcome leave a rate and a < 3

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