A company selling in a country with a strong currency while sourcing from a country with a weak currency ________.
A) practices unethical conduct
B) experiences a trade deficit
C) ends up bankrupt
D) improves its profits

Question

Quizplus · Accepted Answer

When a company sells its products in a country with a strong currency while sourcing from a country with a weak currency, it can benefit from a favorable exchange rate. This can lead to cost savings on sourcing, and higher profits when the products are sold in the strong currency country. Therefore, the company can improve its profits. It is not necessarily unethical conduct, nor does it result in a trade deficit or bankruptcy.

A Company Selling in a Country with a Strong Currency