German firms import machinery from the UK. What will happen to the supply of German goods manufactured using machinery from the UK, if the value of the euro rises against the British pound?

Question

Quizplus · Accepted Answer

When the value of the euro rises against the British pound, German firms can buy more machinery from the UK for the same amount of euros, reducing their production costs. This typically leads to an increase in the supply of goods manufactured using that machinery, represented by a rightward shift in the supply curve.

German Firms Import Machinery from the UK