Assume that Ford Motor Company obtains all of its inputs in the United States and all of its costs are denominated in dollars.An appreciation of the dollar's exchange value
A) enhances its international competitiveness.
B) worsens its international competitiveness.
C) does not affect its international competitiveness.
D) None of these are correct.

Question

Quizplus · Accepted Answer

An appreciation of the dollar's exchange value worsens Ford Motor Company's international competitiveness because it causes the prices of its products to increase in foreign markets. This makes its products less attractive and competitive compared to similar products offered by companies with a weaker currency.

Assume That Ford Motor Company Obtains All of Its Inputs