Question

Which of the following are risks of participating in global trade? (select four answers.)

O shrinking your marketexchange rate risk
O shipping damage
O becoming more dependent on one small area
O breach of contractre
O ducing potential sales

Answer 1

The risks of participating in global trade include shrinking your market, exchange rate risk, shipping damage, and becoming more dependent on one small area.

Step-by-step explanation:

The risks of participating in global trade include:

1. Shrinking your market: When a country engages in global trade, it opens itself up to competition from other countries. This can lead to a decrease in market share as consumers have more options to choose from.
2. Exchange rate risk: When trading with different countries, fluctuations in exchange rates can impact the value of goods and services exchanged. This can affect the profitability of businesses involved in global trade.
3. Shipping damage: When goods are transported across long distances, there is a risk of damage or loss during shipping. This can result in financial losses for businesses.
4. Becoming more dependent on one small area: If a country becomes heavily reliant on a particular region for a vital resource or product, any disruption in that region can have a significant impact on the country's economy.