Fluctuations in exchange rates have no impact on the balance of trade.

Question

Quizplus · Accepted Answer

Fluctuations in exchange rates can have an impact on the balance of trade as they can affect the competitiveness of a country's exports and imports. A stronger currency can make exports more expensive and imports cheaper, leading to a trade deficit, while a weaker currency can make exports cheaper and imports more expensive, potentially leading to a trade surplus.

Fluctuations in Exchange Rates Have No Impact on the Balance