Who Is Most Likely to Benefit When the Dollar Depreciates

question 85

Multiple Choice

Who is most likely to benefit when the dollar depreciates against the euro?

• A)U.S.sellers to foreign buyers
• B)Foreign sellers to U.S.buyers
• C)U.S.buyers of foreign goods
• D)None of these will benefit.

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Definitions:

Absolute Advantage

The ability of an individual, firm, or country to produce more of a good or service than competitors using the same amount of resources.

Lower Cost

A situation where there is a reduction in the total expense required to produce goods or services.

Exchange Rate

The exchange rate determining the worth of one currency in a different currency.

Comparative Advantage

The ability of an entity to produce a good or service at a lower opportunity cost than others, leading to specialized production and trade benefits.