When the domestic currency is strong or expected to become strong,

Question

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When the domestic currency is strong, it makes exports relatively more expensive, which can erode the competitive position of the firm's exports. Additionally, the stronger currency can make imports relatively cheaper, which can also erode the competitive position of the firm's import competition. In this case, the firm should consider locating production facilities in a foreign country where costs are low, as this can help mitigate the effects of the stronger currency on the firm's competitiveness.

When the Domestic Currency Is Strong or Expected to Become