Exchange rates impact international trade from "summary" of EBOOK: Macroeconomics by Rudiger Dornbusch,Stanley Fischer,Richard Startz
Exchange rates play a crucial role in determining the level of international trade between countries. When the value of one currency relative to another changes, it can affect the competitiveness of goods and services traded between nations. For example, if the value of the U. S. dollar strengthens relative to the Japanese yen, American goods become more expensive for Japanese consumers, leading to a decrease in demand for U. S. products. Conversely, Japanese goods become cheaper for American consumers, resulting in an increase in imports from Japan. This dynamic relationship between exchange rates and international trade can have significant implications for a country's economy. Fluctuat...
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