A increase in the value of the U.S. dollar is an example of an economic risk in that it can reduce the value of U.S. multinational firms' international assets and earnings in other countries.

Question

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A stronger U.S. dollar can make it more difficult for U.S. multinational firms to compete in international markets, as their products may become more expensive relative to those of competitors. Additionally, international assets and earnings may be worth less in dollar terms when translated back into U.S. currency. Thus, an increase in the value of the U.S. dollar poses a potential economic risk for U.S. multinational firms.

A Increase in the Value of the U