Question

Why is it important to have a system for exchanging currencies between nations?

to encourage trade


to encourage new business


to protect small businesses


to stop the rising cost of products

Answer 1

To encourage trade, if nations couldn't exchange currencies, valuable resources that one country has cannot be traded to another

Answer 2

Option A.

Step-by-step explanation:

To encourage trade, is the right answer.

Because different countries have their own currency, hence, the international trade needs the exchange of currencies between countries. Whenever goods are sold or purchase globally or internationally, the payment requires to be made in their domestic currency from which the goods are being bought. However, the European Union has simplified trade practice by making “Euro” a common currency between its member nations.