In July 2001, the euro's value relative to the dollar was about €1.00 = $0.85. By November 2009, the euro had strengthened to €1.00 = $1.48. In February 2012, one euro was equal to $1.33 and in August 2015 €1.00 = $0.99 All other things being equal, if a European-based global company wants to preserve margins for goods exported to the U.S. market, the company should:
A)raise prices in dollars.
B)switch to cost-based pricing.
C)adopt a policy of market penetration pricing.
D)reduce prices in dollars.
E)use skimming pricing.

Question

Quizplus · Accepted Answer

To preserve margins when the euro strengthens against the dollar, a European company should raise prices in dollars to offset the currency exchange impact.

In July 2001, the Euro's Value Relative to the Dollar