Asked by Jeremiah Antoine on Jul 25, 2024
Verified
Which of the following statements about the financing of international trade is correct?
A) International trade means the trading of financial assets for foreign exchange.
B) Most international transactions are made with gold.
C) Imports are more important than exports to the economy of a nation.
D) Exports provide the foreign currencies needed to pay for imports.
Financing
The process of providing funds for business activities, making purchases, or investing, through various means such as loans, equity investments, or lines of credit.
International Trade
The exchange of goods, services, and capital between countries, driven by comparative advantages and leading to increased economic efficiency.
Foreign Currencies
These are the currencies of other countries, traded in foreign exchange markets and used in international transactions.
- Attain insight into the processes within foreign exchange markets, particularly the factors that shape currency supply and demand and the importance of exports and imports in influencing exchange rates.
Verified Answer
AM
Asemahle MajekeJul 29, 2024
Final Answer :
D
Explanation :
Exports are crucial for a country because they bring in the foreign currencies that are necessary to pay for imports. This is a fundamental aspect of the balance of trade and the financing of international trade.
Learning Objectives
- Attain insight into the processes within foreign exchange markets, particularly the factors that shape currency supply and demand and the importance of exports and imports in influencing exchange rates.