Fluctuating exchange rates can alter a multinational firm's profits and losses.German company Bayer produces products in Germany and sells them in the United States.If the dollar depreciates against the euro,then Bayer's sales in the United States should ________ because it will take ________ U.S.dollars to purchase the German-made products.

Question

Quizplus · Accepted Answer

When the dollar depreciates against the euro, it means that more U.S. dollars are needed to buy the same amount of euros. Therefore, for American consumers, the cost of purchasing German-made products (in U.S. dollars) increases, potentially leading to a decrease in sales for Bayer in the United States.

Fluctuating Exchange Rates Can Alter a Multinational Firm's Profits and Losses.German