Question: A weak home currency may not be a perfect solution to correct a balance-of-trade deficit because: 1. it reduces the prices of imports paid by

A weak home currency may not be a perfect solution to correct a balance-of-trade deficit because:

1.

it reduces the prices of imports paid by local companies.
2.

it increases the prices of exports by local companies.
3.

it prevents international trade transactions from being prearranged.
4.

foreign companies may reduce the prices of their products to stay competitive.

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