Asked by Marlene Mejia on May 21, 2024
Verified
A country's currency that is not convertible meaning that it cannot be exchanged for other currencies at market determined rates:
A) Can be exchanged by that country's government at its official exchange rate
B) Does not pose any barriers to international trade
C) Does not create any difficulties to repatriate profits back into the company's home country
D) All of the above
Convertible Currency
A currency that can be exchanged for other currencies on foreign exchange markets.
Market Determined Rates
Interest rates that are established by the supply and demand forces in the financial markets without direct government control.
International Trade
The exchange of goods, services, and capital across international borders or territories, influencing global economy and business practices.
- Gain insight into the workings and outcomes of currency exchange and how it influences international corporate operations.
Verified Answer
AA
Ayisha AteekMay 26, 2024
Final Answer :
A
Explanation :
If a country's currency is not convertible, it cannot be exchanged for other currencies at market determined rates. However, the government may still allow for exchange at an official exchange rate, which is typically set lower than the market rate. This can create difficulties for businesses and individuals who need to exchange currency, but it does not necessarily pose barriers to international trade or repatriation of profits.
Learning Objectives
- Gain insight into the workings and outcomes of currency exchange and how it influences international corporate operations.