A U.S. manufacturer that exports goods made at its U.S. plants for shipment to European countries where the local currency is in euros O is competitively disadvantaged when the U.S. dollar declines in value against the euro. O becomes more cost competitive in selling its exported goods in euro-based countries in Europe when the U.S. dollar declines in value against the euro. O has no interest in whether the dollar grows stronger or weaker versus the euro unless it is competing only against companies located in euro-based European countries. O is largely unaffected by changes in the value of the euro versus the dollar; it would, however, be affected if its plants were in European countries where the local currency is in euros. O becomes more cost competitive in selling its exported goods in euro-currency countries when the U.S. dollar gains in value against the euro.

A U.S. manufacturer that exports goods made at its U.S. plants for shipment to European countries where the local currency is in euros O is competitively disadvantaged when the U.S. dollar declines in value against the euro. O becomes more cost competitive in selling its exported goods in euro-based countries in Europe when the U.S. dollar declines in value against the euro. O has no interest in whether the dollar grows stronger or weaker versus the euro unless it is competing only against companies located in euro-based European countries. O is largely unaffected by changes in the value of the euro versus the dollar; it would, however, be affected if its plants were in European countries where the local currency is in euros. O becomes more cost competitive in selling its exported goods in euro-currency countries when the U.S. dollar gains in value against the euro.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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