constant and your pound prices will rise, and to protect U.K. market share, your firm may have to cut the dollar price of your goods to keep the pound price the same. Answer: D Topic: What's Special about "International" Finance? Accessibility: Keyboard Navigation 9) Suppose Mexico is a export market for your U.S.-based company and the Mexican peso appreciates drastically against the U.S. dollar. This means A) your company's products can be priced out of the Mexican market, as the peso price of American imports will rise following the peso's fall. B) your firm will be able to charge more in dollar terms while keeping peso prices stable. C) your domestic competitors will enjoy a period of facing lessened price competition from Mexican imports. D) your firm will be able to charge more in dollar terms while keeping peso prices stable and your domestic competitors will enjoy a period of facing lessened price competition from Mexican imports. Answer: D Topic: What's Special about "International" Finance? Accessibility: Keyboard Navigation 10) Suppose Mexico is a major export market for your U.S.-based company and the Mexican peso depreciates drastically against the U.S. dollar, as it did in December 1994. This means that A) your company's products can be priced out of the Mexican market, as the peso price of American imports will rise following the peso's fall. B) your firm will be able to charge more in dollar terms while keeping peso prices stable. C) your domestic competitors will enjoy a period of facing little price competition from Mexican imports. D) none of the options Answer: A Topic: What's Special about "International" Finance? Accessibility: Keyboard Navigation 11) Suppose that you are a U.S. producer of a commodity good competing with foreign producers. Your inputs of production are priced in dollars and you sell your output in dollars. If the U.S. currency depreciates against the currencies of our trading partners, A) your competitive position is likely improved. B) your competitive position is likely worsened. C) your competitive position is unchanged. D) none of the options Answer: A
constant and your pound prices will rise, and to protect U.K. market share, your firm may have to cut the dollar price of your goods to keep the pound price the same. Answer: D Topic: What's Special about "International" Finance? Accessibility: Keyboard Navigation 9) Suppose Mexico is a export market for your U.S.-based company and the Mexican peso appreciates drastically against the U.S. dollar. This means A) your company's products can be priced out of the Mexican market, as the peso price of American imports will rise following the peso's fall. B) your firm will be able to charge more in dollar terms while keeping peso prices stable. C) your domestic competitors will enjoy a period of facing lessened price competition from Mexican imports. D) your firm will be able to charge more in dollar terms while keeping peso prices stable and your domestic competitors will enjoy a period of facing lessened price competition from Mexican imports. Answer: D Topic: What's Special about "International" Finance? Accessibility: Keyboard Navigation 10) Suppose Mexico is a major export market for your U.S.-based company and the Mexican peso depreciates drastically against the U.S. dollar, as it did in December 1994. This means that A) your company's products can be priced out of the Mexican market, as the peso price of American imports will rise following the peso's fall. B) your firm will be able to charge more in dollar terms while keeping peso prices stable. C) your domestic competitors will enjoy a period of facing little price competition from Mexican imports. D) none of the options Answer: A Topic: What's Special about "International" Finance? Accessibility: Keyboard Navigation 11) Suppose that you are a U.S. producer of a commodity good competing with foreign producers. Your inputs of production are priced in dollars and you sell your output in dollars. If the U.S. currency depreciates against the currencies of our trading partners, A) your competitive position is likely improved. B) your competitive position is likely worsened. C) your competitive position is unchanged. D) none of the options Answer: A