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).
What is the main difference between FED targeting the interest rate versus inflation and which one is Bernanke using nowadays? Name some countries which use this method nowadays.
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
Explain the main features of Harrod - Domar Growth model. How does the Harrod Domar model explain the occurrence of trade cycles?
Use the principles of supply and demand to address a predetermined goal (set by the student) in the gasoline market. Be clear on what the current market indicates and why and what your future goal is.
Describe Okun's law? Give an illustration of how it works.
The market price you pay for each and every particular goods you purchase regularly is probably most closely associated with the last unit of each and every good’s: (1) Marginal utility. (2) Total utility. (3) Producer surplus. (4) Consumer surplus. (5) Economic
how to calculate national income under value added method
Hello guys I want your advice. Please suggest your answer for following economics problems. Macroeconomic policy matters focus upon: (w) price determination within specific markets. (x) conduct and structure of mar
When this market starts in equilibrium at point e on S0D0 and then young American families rousingly “inherit” furniture as their baby-boomer parents shift into smaller retirement homes, then this market will tend to shift in the direction of: (i) point i.
Give a short history of how banking evolved into the sophisticated operation. Start first with the Goldsmith and sum up with the Banking system which we experience nowadays.
18,76,764
1935537 Asked
3,689
Active Tutors
1415381
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!