Question

did you know? value of the u.s. dollar fluctuates against the value of the euro? in 2014, the value of the u.s. dollar relative to the euro was about 30 percent weaker than its value iin 2001. how is a weak currency an advantage in trade?

Answer 1

A weaker domestic currency encourages exports while raising import prices; conversely, a strong domestic currency discourages exports while lowering import prices. A rise in inflation can also have an effect on exports by directly affecting the cost of inputs like labor and materials.

What does a domestic currency mean?

The domestic currency is that which is issued by the monetary authority for that economy or for the common currency region to which the economy belongs and is accepted as legal tender in that economy.

What does foreign currency mean?

funds from a country other than your own: Now, big businesses are permitted to borrow foreign money to buy domestic capital goods.

for example:

• US dollar (USD)

• Euro (EUR)

• Japanese yen (JPY)

• Pound sterling (GBP)

• Australian dollar (AUD)

• Canadian dollar (CAD)

To learn more about domestic currency click on the given link:

https://brainly.com/question/29342415

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