Currency variations can influence economic costs.

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Currency variations introduce exchange-rate risk that can change the actual cost of inputs priced in foreign currencies. When a business buys materials, components, or services from abroad, the amount paid in the home currency depends on the current exchange rate. If the home currency weakens, those foreign-priced inputs cost more in home terms, increasing economic costs; if it strengthens, costs can decrease. The key point is that currency fluctuations can affect costs, not just prices in a narrow sense. There can also be related costs from hedging or translation in financial statements. The other statements miss this reality: exchange-rate movements can and do impact costs, they are not limited to pricing effects, and they do not always reduce costs.