Charles Associates is a U.S.company and has a central production plant in the U.S.(Currency: U.S.dollar).It imports capital equipment and raw materials from Italy and Germany (Currency: Euro).The company exports its products to China (Currency: Renminbi),Japan (Currency: Yen),and India (Currency: Rupee).Which of the following changes in the exchange market is disadvantageous to Charles Associates?
A) The U.S. dollar has weakened against the Renminbi.
B) The U.S. dollar has strengthened against the Rupee.
C) The U.S. dollar has strengthened against the Euro.
D) The Yen has become strong against U.S. dollars.
E) The Euro became weaker against most major currencies.

Question

Quizplus · Accepted Answer

A)If the U.S. dollar becomes strong against the Rupee, the company's exports will cost more in India. This is disadvantageous to the firm.
B)If the U.S. dollar becomes strong against the Rupee, the company's exports will cost more in India. This is disadvantageous to the firm.
C)If the U.S. dollar becomes strong against the Rupee, the company's exports will cost more in India. This is disadvantageous to the firm.
D)If the U.S. dollar becomes strong against the Rupee, the company's exports will cost more in India. This is disadvantageous to the firm.
E)If the U.S. dollar becomes strong against the Rupee, the company's exports will cost more in India. This is disadvantageous to the firm.

Charles Associates Is a U