Economics Exchange Rates Questions
The role of exchange rates in international trade agreements is to determine the relative value of currencies between countries. Exchange rates affect the prices of imported and exported goods, which in turn impact the competitiveness of a country's products in the global market. Fluctuations in exchange rates can influence the volume and direction of trade flows, as well as the terms of trade between countries. Exchange rates also play a crucial role in determining the cost of production, investment decisions, and the allocation of resources in international trade.