A U.S. company that makes all of its goods at a plant in Brazil and then exports the Brazilian-made goods to country markets across the world

Question

Quizplus · Accepted Answer

When the Brazilian real declines in value against the currencies of the countries to which the Brazilian-made goods are being exported, the U.S. company becomes competitively advantaged. The reason for this is that the goods become relatively cheaper for foreign buyers, making them more attractive compared to similar goods produced by companies from other countries. An example would be if the Brazilian real declined in value relative to the Euro, making it cheaper for European buyers to purchase the goods from the U.S. company than from a European company producing similar goods.

A US Company That Makes All of Its Goods at a a Plant