Hello. Here's the question:
What creates a need for exchanging currencies?
A.) Trade between cities in the same country.
B.) A trade route through north to south India.
C.) Trade between different countries ***?
(Exchanging Currencies is the exchange of one country's currency for another one's, such as dollar to yen, or yen to yuan, ect., correct?)
D.)Trade between states with in a country.
Is C right? If not, can you explain to me how not, because I'm pretty confused. Thank you so much.
Yes, C is correct.
When I go to Europe, the first thing I do when I get there is change dollars to euros or pounds. It's so much easier now that much of Europe has just one currency. Just as Europeans can't spend euros for a hamburger or a bus ride in the U.S., Americans can't spend dollars for things in Europe.
You are very welcome, Maggie.
Bless you! Thank you so much! :-)
Yes, you are correct. Exchanging currencies refers to the conversion of one country's currency into another country's currency. In this case, option C, "Trade between different countries," is the correct answer.
To understand why trade between different countries creates a need for exchanging currencies, let's break it down:
When countries engage in international trade, they typically use their own national currency for domestic transactions. However, when they trade with other countries, they need to exchange their currency for the currency of the country they are trading with.
For example, let's say a company in the United States wants to import goods from China. The company needs to pay the Chinese exporter in Chinese yuan. To do this, the U.S. company needs to convert their U.S. dollars into Chinese yuan so that they can complete the transaction. Similarly, the Chinese exporter will likely want to convert the received yuan into U.S. dollars, as they may need to pay their suppliers or make investments in the United States.
This need for converting currencies arises because different countries have different national currencies. Therefore, countries engage in currency exchange to facilitate international trade and ensure that both parties can transact in their respective currencies. This allows for smoother international transactions and promotes global economic activities.
Therefore, option C is the correct answer because trade between different countries creates a need for exchanging currencies.