Generally, MNCs with less foreign revenues than foreign costs will be ____ affected by a ____ foreign currency.
A) favorably; stronger
B) favorably; weaker
C) not; stronger
D) not; weaker

Question

Quizplus · Accepted Answer

MNCs with less foreign revenues than foreign costs will benefit from a weaker foreign currency because it makes their products cheaper in the foreign market and increases their profits when converting foreign currency back to their domestic currency. A stronger foreign currency would have the opposite effect, making their products more expensive in foreign markets and reducing their profits when converting foreign currency back to their domestic currency.

Generally, MNCs with Less Foreign Revenues Than Foreign Costs Will