Export business prefer rising or declining dollar
Would export businesses choose a rising or declining dollar? Would it be similar for a European tourist on a budget and visiting the Grand Canyon? Explain your answer.
Expert
Export businesses would prefer a declining dollar. Yes, it would be the same for a European tourist on a budget and visiting the Grand Canyon. As the dollar declines, more dollars are necessary to buy a specific amount of foreign currency and less foreign currency to exchange for more dollars. Thus in the case of US exports, a declining dollar facilitates the improvement of sales in foreign countries, because the US goods will be available cheaper. In short, US export goods become comparatively less expensive as compared to domestic goods. More foreign consumers will hence prefer buying US goods. Hence US companies will naturally export more goods to make profits out of the available opportunity. Thus export businesses would prefer a declining dollar.
In a similar manner, when dollar declines, travel to US becomes less expensive for foreigners, since they can exchange their currency for more US dollars. When a European tourist visits the Grand Canyon, he/she can exchange less Euros for more dollars, which could be spent as his/her tourism expenses. So tourists on budget can easily afford to visit US in a period of declining dollar. Thus export business and foreign tourists would prefer a declining dollar (Federal Reserve Bank of Chicago, 1997).
I have a problem in economics on Price ratios and marginal utility ratios. Please help me in the following question. The efficiency in consumption needs equality of: (i) Income distribution. (ii) All product price and resources. (iii) MC and MR. (iv)
Question: Some commentators have argued that the failure of the "Supercommittee" is good thing for the economy? Do you argree? Answer: Q : What is Bank rate Bank rate : This is Bank rate: This is the rate at which the central bank loans money to commercial bank.
Bank rate: This is the rate at which the central bank loans money to commercial bank.
For every value of real GDP, actual investment equals? A. Planned Investments B. The difference between planned investments and actual saving. C. The difference between planned saving and actual saving. D. Planned Saving
How Bank rates control the credit? Answer: Bank rate is the rate of interest at which the Central bank lends to Commercial banks. By increasing the bank rate centra
Speculate regarding the behavior which could result from Internet technology in airline transactions and propose 2 or more strategies to deal with them.
What points out revenue deficit? Answer: Revenue deficits are stated as the surplus of revenue receipts. Revenue Deficit = Revenue Expenditure - Revenue Recei
Consider a model economy with a production function Y = K0.2(EL)0.8, where K is capital stock, L is labor input, and Y is output. The savings rate (s), which is defined as
A tax is shifted forward when the tax burden causes the: (w) consumers to pay higher prices. (x) lower purchasing power for the party bearing the legal incidence. (y) workers to experience lower take home wages. (z) decreased dividends to corporate st
Distinguish between full-employment equilibrium and Under-employment equilibrium. Whenever equality among AD and AS is at full employment level it is termed as full employment equilibrium. Although whenever equali
18,76,764
1939032 Asked
3,689
Active Tutors
1414738
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!