MANAGEMENT

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BUISENESS MANAGEMENT

MERCHANDISING

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Sometimes the U.S. dollar is in a really good place when considering the exchange rate and it is considered strong. Sometimes though, it is weak and the U.S. dollar is not worth as much as other currencies such as the euro or pound. When the U.S. dollar is weak, how does that affect the price of importing/exporting?
A
It raises the price of U.S goods forother countries.
B
Itlowers the price of U.S. goods for other countries.
C
It lowers the price of other countries’goods imported to the U.S.
D
It does not affect the pricing.
Explanation: 

Detailed explanation-1: -Weak dollar is better for American exporters. The reason is a “weak” currency stimulates exports by making it cheaper for other countries to buy stuff from us. It is also cheaper for tourists from other countries to visit the US when the dollar is weaker (their currency is stronger).

Detailed explanation-2: -A strengthening U.S. dollar means that it now buys more of the other currency than it did before. A weakening U.S. dollar is the opposite-the U.S. dollar has fallen in value compared to the other currency-resulting in additional U.S dollars being exchanged for the stronger currency.

Detailed explanation-3: -The implications of words such as “strong” and “weak” can mislead people to believe that an appreciating currency is always better for the economy than a depreciating currency, but this is not the case. In fact, there is no simple connection between the strength of a country’s currency and the strength of its economy.

Detailed explanation-4: -Strong Dollar: An Overview The dollar is considered strong when it rises in value against other currencies in the foreign exchange market. A strengthening U.S. dollar means it can buy more of a foreign currency than before.

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